| Your written contract with your Chinese supplier | | | | for delivery if partial delivery is agreed upon. |
| is your best evidence of the agreement that both | | | | Breach of contract provision |
| of you have entered into. Without it, you may | | | | Include clauses that clearly state the liability of the |
| encounter some difficulty in pursuing legal action if | | | | other party in case there is a breach of any of |
| things go wrong. | | | | the terms of the agreement. There are provisions |
| While a purchase invoice may be considered legally | | | | of the Chinese law on contracts that you could |
| a contract between you and your supplier, it may | | | | use for your protection in case your supplier |
| not contain the following essential provisions of a | | | | defaults in its obligations. |
| purchase contract: | | | | Dispute settlement |
| Company details | | | | Specify how you wish to settle disputes or |
| Ensure that your contract carries the name and | | | | disagreements arising out of the purchase |
| address of all parties, as these appear in their | | | | contract. The usual modes are litigation and |
| respective business licenses. | | | | arbitration. In recent years, arbitration has been |
| Contract object, quantity and quality | | | | the choice of most commercial contracts because |
| This provision should be able to define what it is | | | | litigation is time consuming and expensive. There is |
| that you bought and how many. Aside from | | | | also the so-called "home court" advantage in |
| stating clearly the quantity of the subject items, | | | | litigation which may favor the other party |
| you should also include a full product description in | | | | because Chinese commercial law requires that the |
| such details as to avoid mistakes in the delivery. | | | | suit be filed in the court where the defendant is |
| Include quality specifications such as "AAA", "triple | | | | domiciled. If your contract specifies arbitration, this |
| A" or "grade A" if necessary. | | | | provision will prevent any court from having |
| Contract price or remuneration | | | | jurisdiction over a case that involves any of the |
| It is best to state the amount in numbers as well | | | | terms of your contract. Remember that you |
| as in words. If there is a discrepancy between | | | | have to choose one mode: arbitration or litigation, |
| the amount in numbers and the amount in words, | | | | not both. |
| then the amount in words should prevail. You may | | | | While you may be able to come up with a draft |
| also wish to include price adjustments in cases of | | | | of your own purchase agreement with the |
| currency fluctuations. If the price of your contract | | | | recommended clauses, it is still advisable for you |
| is US-dollar denominated then you should state | | | | to engage the services of a competent local |
| that the currency exchange rate established by | | | | lawyer who can create a standard purchase |
| the Bank of China shall govern. | | | | agreement for your business. Your local Chinese |
| Period and place of performance | | | | lawyer should be able to come up with the best |
| This provision sets a time for the delivery or | | | | agreement for your protection in a format that |
| performance of a service. Be as specific as | | | | you can use many times over. In the meantime, |
| possible so that it is clear to both parties when | | | | whatever you do, always confirm your verbal |
| the deadline for delivery is, as well as where it is | | | | agreements in writing. |
| supposed to be made. Specify also the milestones | | | | |