“In Sri Lanka there are equally few limitations to freedom of contract, but resolving the standardized dispute through the courts takes 1,318 days—almost 4 years,” the report said.
“Parties might be able to include a wide array of covenants in their agreements, but long enforcement times can nullify the utility of those covenants,"
"A slow contract resolution process frustrates freedom of contract,” the report further stated.
The 'Doing Business’ rank which used 34 sampled economies to investigate limitations to freedom of contract has found that only four countries including Sri Lanka set no statutory limit on interest rates.
Among the 34 economies covered, Tunisia has the highest number of limitations to freedom of contract, with 8 of the 10 limitations measured.The report further said Sri Lanka has made paying taxes more costly for companies by increasing the reduced corporate income tax rate for qualifying small and medium-size enterprises.
The ranking also identifies Sri Lanka, which is among the 50 economies that frequently use the Doing Business indicators as one input to inform programs for improving the business environment by forming reform committees.
Doing Business 2015, a World Bank Group flagship publication presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies—from Afghanistan to Zimbabwe—and over time.
Doing Business measures regulations affecting 11 areas of the life of a business.
Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Doing Business also measures labor market regulation, which is not included in this year’s ranking.