By Steven Chow

I have been approached frequently by buyers ripped off by Chinese suppliers.

Oftentimes when I ask them to send me the purchase contract they signed with the suppliers, some of them will send me a pro forma invoice (PI), and some will say, “No, I don’t have a contract or PI; I keep the receipt that I’m sending them money,” or “Do you want to see the emails or instant messenger conversation record?”

Practically, a PI is considered to be a contract, but even a PI is too simple to protect your rights. You need to write down the following terms and conditions on paperwork – in other words, have a real contract. As per Contract Law of the People’s Republic of China, a contract shall contain the following clauses:

1. Title or name and domicile of the parties;
2. Contract object;
3. Quantity;
4. Quality;
5. Price or remuneration;
6. Time limit, place and method of performance;
7. Liability for breach of contract; and
8. Methods to settle disputes.

The following are bonus tips to sign a sales contract with a Chinese supplier (tips will be given in the order of contract clauses): (more…)