I'm just curious about how a contract between two parties in different countries would handle breaches/consequences of said contract.
Let's say between two parties in USA and Asia. If the contract says that it will be governed by Asia law, and in the event of a breach, there is consequence/penalty of $x for each violation occurrence.
If there was a breach by the party in USA, how exactly would that contract be enforced by the party in Asia? Considering:
Typically the aggrieved party has to file a lawsuit in the jurisdiction where the contract is governed, win the case and then collect the damages.
To collect the damages you have to locate any assets, then get a judge in that jurisdiction to award you the assets.
The "International Private Law" contains rules on what happens if there is a conflict between members of two different countries. Check out the Wikipedia entry:
http://en.wikipedia.org/wiki/Conflict_of_laws You need to take into account the justice system and the associated costs of suing in the other country. When we were in the situation that we needed to sue someone from the U.S. we were surprised how expensive this is in the U.S. compared to Western Europe. If you need to be present in court, the price is even higher, you need to pay for flights to the U.S., hotels etc.
If your chances of winning the dispute are good, you can find a lawyer, who sues on your behalf on a contingency basis. This is often a better option than dropping the law suit. We have done this successfully.