On The Theory And Practice Of Gambling Agreement

The gambling agreement,also known as the valuation adjustment mechanism,originated in the U.S.equity investment industry.It was created due to the demand of investors for the valuation adjustment of financing enterprises and solved the problem of information asymmetry in the valuation judgment of financing enterprises by both parties to the transaction.The issue of whether financing enterprises can be the subject of gambling has always been controversial in our country,and it is also a judicial judgment risk that our investment industry has to face.From the perspective of legal analysis and foreign gambling judgment cases,we should affirm the legitimacy of financing enterprises as a party of gambling agreements and stick to the principle of freedom of contract.In practice,the attitude of Chinese courts and regulators towards gambling agreements has had a significant impact on the design and implementation of gambling agreements in China.Therefore,Chinese investment institutions should learn from the experience of foreign investment institutions,strengthen their investment expertise and the company’s operation ability,adopt diversified methods to design gambling terms,and make legal and reasonable legal risk avoidance arrangements in gambling agreements based on the development needs of financing enterprises and the current laws and regulations and relevant regulatory requirements of China.