Compliance with Laws and Regulations

Contract Type:
Generic Contract

Each party shall comply with all laws, statutes, regulations and codes relating to anti-bribery, anti-corruption, anti-money laundering, anti-tax evasion, data protection, competition, trade sanctions, and human rights in connection with this Agreement.


Here is a plain English explanation of the Compliance with Laws and Regulations clause:

This clause requires both parties to follow all relevant laws and regulations related to several key compliance areas when carrying out the contract.

Specifically, they must comply with legal requirements concerning:

- Anti-bribery and corruption

- Anti-money laundering

- Anti-tax evasion

- Data protection and privacy

- Fair competition and antitrust

- Trade sanctions

- Human rights

This establishes a clear mutual duty to adhere to laws governing ethics, financial crimes, fair business practices, sanctions, and human rights.

It aims to ensure the parties avoid illegal conduct in these high-risk compliance zones that could create legal exposure for the other side.

In summary, both sides must legally comply in these specific compliance areas when fulfilling their contractual obligations.

History of the clause (for the geeks)

The compliance with laws and regulations clause has its roots in evolving statutory compliance duties. Key aspects in its development include:

- In the early 20th century, contract drafters referenced specific laws like antitrust to allocate associated risks. But coverage was uneven.

- From the 1960s, statutes proliferated across compliance spheres, leading drafters to use broad compliance clauses to catch new laws.

- US drafters added long regulatory compliance riders. UK drafters favored concise mutual compliance terms.

- As cross-border business grew, compliance clauses addressed risks like foreign bribery and economic sanctions.

- Boilerplate compliance language was criticized as vague. So drafters enumerated laws or risk areas like anti-bribery.

- Customization increased, targeting key laws or tailoring to industries like pharmaceuticals.

- Today compliance clauses continue evolving as statutes multiply. They remain vital for distributed regulatory risk.

In summary, the modern compliance with laws clause emerged from increasing statutory duties across borders and sectors. It remains essential but with more tailored approaches gaining favor.