Contract Disputes in China

HAIYU assists overseas companies and individuals with contract disputes in China, including supplier breaches, unpaid debts, defective goods, payment disputes and litigation assessment.

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Contract Disputes Involving Chinese Companies

U.S. companies dealing with Chinese suppliers, overseas buyers and international businesses can face a dispute long before a court claim is considered. An order may not arrive, a batch may fail the agreed specification or a commercial balance may remain unpaid.

The first task is to establish who contracted, what was agreed and what the records support. A manufacturer, export company, agent and payment recipient can be different entities. A dispute about performance, a regulatory hold and a request for repayment may also require separate responses.

HAIYU INTERNATIONAL is the international division of Timely Rectitude Law Firm in China. Our role is China-side legal support for overseas clients: reviewing evidence, assessing options and discussing the work needed before further engagement.

Common Contract Disputes We Handle

Supplier refuses to refund

Review the repayment basis, cancellation terms, payment chain and supplier’s stated deductions.

Goods not delivered

Check the accepted delivery milestone, shipment evidence, extensions and the buyer’s own obligations.

Goods do not match specifications

Match the accepted standard to inspection results, batch records and evidence of the condition of the goods.

Advance payment disputes

Identify the payment purpose, recipient, agreed conditions and amount still outstanding.

Breach of a manufacturing agreement

Review drawings, samples, approvals, production milestones, tooling and correction proposals.

Freight and logistics disputes

Locate the cargo and examine transport documents, payment obligations and the written basis of any hold.

Distribution agreement disputes

Check territory, supply obligations, termination provisions, account balances and relevant notices.

Unpaid commercial debt

Reconcile invoices, performance records, acknowledgments, credits and repayment proposals.

What Can You Do When a Chinese Company Breaches a Contract?

Preserve the full agreement and correspondence. Check inspection, notice, cancellation and dispute-resolution terms before declaring termination or paying further charges. Define the outcome you need and document losses and steps taken to limit them.

Evidence and contract review: establish the obligation, breach, buyer’s performance and available proof.
Company verification: identify the contracting Chinese entity and explain any different payment recipient or manufacturer.
Demand and negotiation: request a documented response and evaluate measurable correction, payment or settlement terms.
Evidence or asset preservation: assess urgency, legal requirements and possible security where an application is appropriate.
Arbitration or litigation: check the agreement, competent forum, applicable rules and claim preparation.
Enforcement: consider available assets and how a judgment or award could translate into actual recovery.

Under the Civil Code, remedies for breach can include performance, remedial measures or damages, depending on the obligation and circumstances. No particular remedy or recovery should be assumed before reviewing the facts.

Can a Foreign Company Sue a Chinese Company?

Yes. Foreign companies can bring civil claims in China. The court still needs jurisdiction over the dispute, and a valid arbitration agreement may determine a different route. The correct defendant, claim basis, evidence and authorization documents must be established.

A foreign company does not need to assume that opening a Chinese subsidiary is the first step. It should obtain an assessment of the forum, foreign-document formalities, translation, likely work and enforcement prospects. Advice about contract disputes in China should cover the practical path to a result as well as the merits of the claim.

Source: PRC Civil Procedure Law (2023 amendment) — foreign parties, jurisdiction and proceedings

What Documents Should You Prepare?

Send an indexed set of key records and a short chronology. Keep originals and explain discrepancies. Include documents that may support the supplier’s position so the review can address them.

Contract and all attachments or amendments
Accepted purchase order and agreed specifications
Invoices and an outstanding-balance calculation
Bank transfers, payment instructions and receipts
Emails and relevant WhatsApp, WeChat or other chat records
Shipping, receipt and inspection documents
Chinese company name, registration identifiers and known addresses
Court, arbitration or authority notices and response dates

How HAIYU Can Assist

01
Initial Assessment
Identify the parties, dispute, amount, desired outcome and any urgent deadline.
02
Evidence Review
Review the agreement, payment trail, performance records and correspondence; identify missing proof.
03
China-side Verification
Check the Chinese counterparty’s legal identity and relevant available company information.
04
Strategy
Compare scope, costs, urgency, the available forum and prospects of actual recovery.
05
Negotiation / Legal Action
Once engaged, undertake the agreed work and review the next decision as the matter develops.

The initial review identifies the China-side issue and proposed next step. Availability, authorization, scope and fees are agreed before substantive work begins. Representation and any recovery depend on the facts and engagement.

Questions About Contract Disputes in China

What should I send about a dispute with a Chinese supplier?

Prepare the contract or purchase order, counterparty details, invoices, payment records, delivery records and relevant correspondence. Add a short timeline describing what was agreed, what happened and the outcome you are seeking. Highlight any response deadline or pending proceedings.

Can you review a bilingual contract before I sign?

Contract review is part of this service. Send both language versions and explain the transaction, the parties and any clauses you are concerned about. Identify which version is intended to prevail, if the draft says so. The scope of review and any drafting or negotiation work should be agreed before work starts.

Do I need litigation support as well as contract advice?

That depends on the dispute and the documents. Tell us if a court or arbitration notice has already arrived, or if there is an urgent asset issue. The lawyer can then discuss whether the work involves contract review, negotiation or a separate dispute-resolution engagement.

Can a foreign company bring a claim against a Chinese supplier?

Foreign companies can bring civil claims in China, subject to jurisdiction and procedural requirements. A valid arbitration agreement may determine the route. Verify the defendant, contract, evidence and foreign-document requirements before filing.

Can you guarantee repayment or a successful claim?

No. The assessment considers the agreement, evidence, forum, costs and recovery prospects. A judgment or award does not itself guarantee collection. Scope, authorization and fees are agreed before substantive legal work begins.

Tell us what happened

Send your contract, payment records, key correspondence and any deadline. We can assess the China-side questions before discussing further work.