When a supply contract is prepared with a Chinese company, there is an important question: is that contract going to be enforceable in China in case of breach? In the case that there is a claim against the Chinese company there some requirements that shall be complied.

Contracts in China are more formal documents than in Europe. The reason the way they are signed.
When advising our customer when working in the draft of supply contract, we always instruct our custom…

‘Guanxi’ is the word used in China to name the influential contacts and that is often misunderstood by foreigners.

The global kitchenware industry feeds on the contribution of Chinese suppliers that, over the past 15 years, have developed a huge productive capacity and quality. The vast majority of the brands that consumers find in the market are Western brands but their production is in the hands of Chinese suppliers.

Regarding the outsourcing of purchases and manufacturing to China it is sometimes heard that the use of a company that facilitates this job adds a cost to the product’s price, and it would be cheaper to do it directly from the company. Obviously to do so directly is an option, the fact that it is cheaper is, as always, debatable.

Due to Chinese mentality, in which avoiding by any means public humiliation is something that conditions their behavior. As opposed to the western world where being sued is a legal issue that does not implicate guilt, in China it is considered humiliating, and such an humiliation is something everyone pretends to avoid.

Supply contracts written by western lawyers always included indemnification clauses for defective products, in many occasions those lawyers have not visited China, and they are not aware about how these clauses works there.