Contracts: Make Made in China a Good Thing

I continually praise the advantages of foreign enterprises having proper contracts in China. Yesterday I saw a distinct situation that support getting one.

Our client bought a huge qty of goods for US$120k from a Shenzhen based enterprise. Before the purchase, they received the spec sheet which matched their requirements and the Texas compliance laws. Unfortunately, they were unable to use the product because they broke apart, and, as a result, they lost tons of cash and clients.

When they asked if we can help them get reimbursed for the item and repaid for the damages to their enterprise. We sent them a response not to their liking. Our first question was: “Did you have a contract with the Shenzhen based firm?” Our next questions were, “Is your OEM contract in Chinese? Does it have the Chinese enterprise’s seal on it? Does it have amendments for failing to quality needs? Is it applicable in China?”

Unfortunately, they answered No to all of the questions. In fact, if you want to enforce your contract, you must answer yes to all of the above comments. Contracts scare the hell out of Chinese manufacturers so those who engage in one are the real deal (usually).

Usually though, issues pertaining to Chinese products come in three:

  1. Selecting the correct partner
  2. Asking for a China-specific contract.
  3. Checking quality control

Once you have an issue, the contract is the only thing that can rescue you, but to avoid having an issue, all three are

I continually praise the advantages of foreign enterprises having proper contracts in China. Yesterday I saw a distinct situation that support getting one.

 

Our client bought a huge qty of goods for US$120k from a Shenzhen based enterprise. Before the purchase, they received the spec sheet which matched their requirements and the Texas compliance laws. Unfortunately, they were unable to use the product because they broke apart, and, as a result, they lost tons of cash and clients.

 

When they asked if we can help them get reimbursed for the item and repaid for the damages to their enterprise. We sent them a response not to their liking. Our first question was: “Did you have a contract with the Shenzhen based firm?” Our next questions were, “Is your OEM contract in Chinese? Does it have the Chinese enterprise’s seal on it? Does it have amendments for failing to quality needs? Is it applicable in China?”

 

Unfortunately, they answered No to all of the questions. In fact, if you want to enforce your contract, you must answer yes to all of the above comments. Contracts scare the hell out of Chinese manufacturers so those who engage in one are the real deal (usually).

 

Usually though, issues pertaining to Chinese products come in three:

 

  • Selecting the correct partner
  • Asking for a China-specific contract.
  • Checking quality control

 

Once you have an issue, the contract is the only thing that can rescue you, but to avoid having an issue, all three are required.

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