How you make sure a contract is written correctly

When your business is based on imports and you are purchasing a product from a Chines supplier, it is mandatory to have a Chines contract! An invoice is not enough, because it cannot protect you from possible issues that might come up, like delivery delays, wrong product specifications or any other product misalignments. Without having a Chinese contract, the factory cannot be made responsible for any of such issues.

What many companies are not aware of is that an international type of contract, written in English, has no value in China. In order for the contract to be valid and recognized in China, it has to be written in the Chinese language and based on the Popular Republic of China legislation.

Pay attention to the following items:

  1. Verbal agreements with the manufacturer’s representatives are not enough. You need to have those agreements in written, with full details and have them signed by a manager or director.
  2. If you have a contract, but it is signed by a sales representative, it won’t be enough to protect you.
  3. Never have changes on the contract, once it was agreed and signed. This would signal the supplier that you are willing to accept a lower quality of the products you ordered. This is a slippery road, so you need to pay attention to it.
  4. A well written contract is something you need to have! It will increase your negotiation power and keep the manufacturer bound to the quality standards that you agreed for.

Do I really need a contract?

There is a single answer to this question and it is always “YES”!

In the case in which the manufacturer won’t stick to the contract terms, you might end up in the justice system. The Chinese legislation offers some protection in such cases, but the first thing you’ll need to do will be to prove the existing of a written contract.

For your Chinese contract, just use a simple language, but make sure you don’t miss any detail related to your desired products. Don’t overdue it and use short sentences. Never forget to stipulate manufacturer’s responsibility to exchange all products that will have any issues. Make sure the contract is signed by the key people in the manufacturer’s organization.

Make sure that the address of the factory in which your products will be produced will be mentioned in your Chinese contract! Sometimes, the suppliers are externalizing the production towards factories that use low quality materials.

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