TAIWAN Trends and Developments Contributed by: Susan Lo, Chi Lee and Evelyn Shih, Lee and Li Attorneys-at-Law
Taiwan High Court 111-Chong-Shang-Zi No 362 The court dismissed the claim that an individual should be bound by a JV agreement that they signed on behalf of a JV party. The court found that the JV agreement was not incorporated by reference and therefore had no binding effect to a third party. This decision affirmed that the principle of privity of con - tract applies to JV agreements – ie, only the parties to such agreements may derive rights or bear obliga - tions under them – and signified the importance of clearly incorporating related agreements to ensure the enforceability of JV arrangements.
were awarded. This judgment clarified the enforce - ability of post-termination non-compete clauses in JV contexts, by emphasising alignment with the JV’s lawful business scope. Taiwan High Court 113-Shang-Zi No 239 The court examined a non-compete clause in a JV agreement that allowed a JV partner to continue its existing business operations with prior disclosure and good-faith discussion among the JV partners. The plaintiff argued that the JV partner may only continue to accept orders from its existing clients and is prohib - ited from accepting orders from new clients. However, the court held that the non-complete provision clearly permits the partner to continue its existing business operations and should not be reinterpreted to impose stricter obligations absent explicit language in the JV agreement. The court reaffirmed that contractual inter - pretation of JV agreements must respect the parties’ expressed intent and commercial context.
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