When a buyer sends me a supply contract, I do not begin with the governing-law clause on the last page. I begin with the first commercial promise and follow it through the documents: who made it, what exactly was promised, what must happen before payment, and what the buyer can require if the promise is broken.
That order catches a surprising number of problems. The document may use a supplier's English trading name while the business licence belongs to a different Chinese company. The product schedule may say "same as sample" without identifying the sample. The payment clause may require the balance before inspection. The remedies may sound forceful but never say when a refund is due or where a dispute must be brought.
Many foreign buyers start with a contract template from home. There is nothing inherently invalid about doing that. The difficulty is fit. A template written for a domestic transaction may assume a familiar company register, local evidence rules, a nearby court and a seller whose name is the same on the contract, invoice and bank account. A China supplier transaction may involve a mainland manufacturer, a trading company, a Hong Kong collection company and an export agent. The drafting has to explain that structure rather than pretend it is not there.
The applicable legal framework also needs to be identified rather than assumed. Depending on the parties, their agreement and the transaction, Chinese law, the United Nations Convention on Contracts for the International Sale of Goods (CISG), or another chosen law may be relevant. The points below are therefore review questions, not universal clauses to paste into every order.
Who is making the promise?
The safest starting point is the supplier's full Chinese legal name. I compare it with the business licence and official registration record, then check the Unified Social Credit Code, registered address and legal representative. That entity should be recognisable in the signature block and throughout the contract. An English brand name on a booth, Alibaba page or email footer is not a substitute.
The next question is authority. Who is signing, what position does that person hold, and in whose name are they acting? For an important order, I want the record to make that answer clear. A signature by someone other than the legal representative is not automatically ineffective; employees and authorised representatives can bind a company in appropriate circumstances. It is still better to deal with authority before payment than to litigate about it later.
The company chop matters, but not in the simplistic way often described online. Article 22 of the Supreme People's Court's 2023 interpretation on the General Provisions of the Contract Book addresses contracts signed in an organisation's name where authority, signatures and seals do not line up neatly. Among other things, it prevents a company from relying only on the argument that a seal was unfiled or forged where the authorised person acted in the organisation's name and within authority. It also recognises circumstances in which a signed contract may bind without a company seal, or a sealed contract may bind without a handwritten signature. The practical lesson is not that the chop is unimportant. It is that identity, authority, wording and conduct have to be read together.
I then compare the seller with the payment beneficiary and the factory. If the mainland supplier asks for payment to a Hong Kong affiliate, the contract should identify the collector and explain whether payment to it discharges the buyer's payment obligation to the mainland seller. The separate guide on Hong Kong supplier bank accounts deals with that structure in more detail. If a trading company uses an independent factory, that can also be legitimate, but the contract should not quietly release the trading company from responsibility for what the factory does.
What goods has the supplier actually promised to deliver?
"Good quality" is not a specification. Neither is "export standard", "A grade" or "same as last order" unless the contract identifies what those words mean. I look for a product schedule that can be used by a factory, an inspector and, if necessary, a judge or arbitrator without rebuilding the bargain from memory.
For a manufactured product, the useful detail may include model and drawing numbers, dimensions and tolerances, materials, components, performance, colour, labelling, packaging, destination requirements and the version date of an approved sample. Not every order needs every field. The point is to record the characteristics that determine whether the buyer can use or resell the goods.
Inspection language needs the same care. The contract should identify who inspects, where and when inspection occurs, which method or sampling standard applies, what record is produced, and what happens after a failed result. A pre-shipment inspection can be valuable, but it may not reveal a latent defect or prove that the shipped goods are the units that were inspected. I therefore check whether pre-shipment approval is final acceptance, one payment condition, or simply one layer of evidence.
Chinese Civil Code Articles 620 to 622 address inspection and notice in sales contracts governed by Chinese law. They distinguish an agreed inspection period from the position where no period is agreed, and they recognise that an unrealistically short period may only work for apparent defects. Those provisions are one reason I avoid importing a short acceptance clause without asking whether the product can actually be tested within that time.
The public court cases make the same point from the other end of the transaction. In the glove dispute summarised as CICC CLOUT Case 2141, the quality standard, shipment record, video meetings and supplier-side admissions formed part of the evidence around defective and delayed performance. In CICC CLOUT Case 2199, defects in gauze were found, but they were not serious enough to justify cancelling the whole contract, and the timing of the buyer's avoidance claim also mattered. My real Chinese supplier court-case guide explains those outcomes. For contract review, the narrower lesson is that the promised standard, inspection record, severity of the defect and timing of the buyer's response need to work together.
What must happen before the next payment is due?
I do not treat a payment schedule as a row of percentages. Each instalment should correspond to something the buyer can identify: approval of a drawing, completion of tooling, a production milestone, a passed inspection, delivery of agreed shipping documents, or another event that makes commercial sense for the order.
The evidence required for that event should also be stated. "Pay when goods are ready" leaves open who decides readiness. "Balance against inspection" is better, but still incomplete if the inspection standard, inspector and failed-inspection procedure appear nowhere else. For customised equipment, the buyer may need a factory acceptance test before shipment and a separate site acceptance process after installation. For ordinary goods, a proportionate arrangement may be much simpler.
I also read the payment clause alongside the shipping term. An Incoterms rule can allocate delivery tasks, costs and risk in important ways, but it does not by itself answer every question about product conformity, title, inspection, payment or refund. Those issues should not be left to three letters such as FOB, CIF or DDP.
If a supplier cannot satisfy a payment condition, the contract should say what happens next. Does the supplier receive time to cure? Can the buyer suspend the next instalment? When does an advance become refundable? To which account must the refund be sent, in which currency, and by what deadline? These points are especially important where the seller and payment beneficiary differ.
A drafting point, not a universal clause: instead of saying only "30% deposit, 70% before shipment", define the evidence that makes the balance due and the consequence of a failed inspection or missed long-stop date.
The right wording depends on the product, bargaining position, production cycle and governing framework. Calling every advance a "deposit" can also conceal different legal consequences, so the Chinese and English terminology should be checked rather than translated mechanically.
What happens when performance goes wrong?
A contract should be usable on the difficult day. I test the remedies against several ordinary scenarios: delivery is late but still useful; part of the order is missing; the goods fail inspection but can be repaired; the defects make the goods commercially unusable; or the supplier accepts a return and then delays the refund.
The answer should not always be full cancellation. Depending on the breach and applicable law, the practical remedy may be cure, repair, replacement, re-performance, price reduction, rejection of affected goods, partial refund, termination, damages, or a negotiated combination. The Civil Code provisions on breach and remedies, including Articles 577 and 582 to 585, illustrate why the contract should distinguish these outcomes. An agreed liquidated-damages figure is not necessarily an automatic amount immune from review: Article 585 allows adjustment on a party's request where the agreed amount is lower than the loss or excessively higher than it.
Notice mechanics deserve more attention than they usually receive. The contract should identify where notices go, what information a defect notice must contain, how quickly the supplier may inspect or respond, and whether ordinary operational messages count as formal notice. Buyers should still preserve complete email, WeChat, platform and inspection records. A clause cannot reconstruct evidence that was never created.
Finally, I check the dispute clause as an operating instruction, not decoration. It should not ambiguously combine arbitration and court litigation, name an institution that does not exist, or select a forum without considering language, interim measures, cost and enforcement. The governing-law and prevailing-language provisions also have to be consistent with the rest of the drafting. An English contract is not automatically weaker, and a bilingual contract is not automatically safer; the two texts must express the same transaction and say how inconsistencies are handled.
This is where the review comes back to the beginning. A strong remedy against the wrong company has limited value. A carefully chosen forum cannot repair an undefined product standard. A refund right is harder to use if the contract does not identify who received the money. Contract review is the work of connecting those points before the buyer gives up leverage by paying.
What I ask the buyer to send
The complete contract, purchase order or pro forma invoice; the supplier's business licence; payment instructions; specifications, drawings or approved sample record; proposed payment and delivery schedule; and the material communications containing promises that have not yet reached the contract.
What the review should produce
A clear explanation of the material risks, proposed drafting changes and the points that need commercial confirmation. The scope depends on the document, product, order value, governing framework and deadline.
Questions buyers ask before contract review
What should I send for a Chinese supplier contract review?
Send the complete contract, purchase order or pro forma invoice; the supplier's business licence; payment instructions; product specifications or approved sample record; the proposed payment and delivery schedule; and the material emails or messages that contain commercial promises not yet written into the contract.
Is a Chinese company chop enough to make the contract safe?
No. A company chop can be important evidence, but it does not replace checking the Chinese legal entity, signatory authority, contract wording and payment beneficiary. Chinese law also does not make the effect of every contract depend on a filed company chop alone.
Can I use my home-country contract template?
It may be a useful starting point. It should still be checked against the actual Chinese seller, transaction documents, applicable law, inspection process, payment structure, remedies and dispute forum. The template is not automatically invalid because it was drafted abroad; the risk is that familiar wording may not produce the result you assume in this transaction.
Official sources used
- National Laws and Regulations Database — Civil Code of the People's Republic of China
- Supreme People's Court — Interpretation on the General Provisions of the Contract Book of the Civil Code
- China International Commercial Court — CLOUT Case 2141
- China International Commercial Court — CLOUT Case 2199
The official materials above support the general discussion only. The governing law, contract effect and available remedy depend on the parties, transaction, agreed terms and facts of the individual matter.