Purchase Contract with a Chinese Supplier

When you decide to run the order yourself, these are the points to watch.

You may be holding only two things. A five-line sheet: product, quantity, unit price, total, delivery date. A clear sample bag with a handwritten label: model, colour, date.

No contract was ever signed on this order. Most of the time, an order like this does not need one. What you check against is the thing in the bag.

But the date on the label may be blank. Then that thing in the bag cannot be tied to a batch two months later. If you never took the photo with a ruler in it, size is something you can only talk about. When you and the factory each tell your own story, either side can say "that is how it was at the time".

This piece follows the route where you do the work yourself. It covers what holds quality on a small order, and when a contract comes into play. It covers what a PI is in between, and what you hold when you really have to claim. Delivery date, inspection and changes get one section of their own.

On a small order with no contract, what proves the goods are wrong?

Three things: a sample that stays in your hands, a sheet that states the specification, and a set of photos taken before you ordered. With all three, your word carries weight; missing one, you are telling a story.

Start with the lightest method: photos. A few hundred pieces, a standard model, a small amount — photos are enough. Six angles: front, back, both sides, top, bottom. Stand a ruler beside it, and the ruler has to show millimetres. Shoot in daylight, at a window. The yellow lamps in a warehouse turn dark grey into black and off-white into cream, and afterwards nobody accepts it.

Store the photos in email, send them to yourself, copy the factory. Photos kept in a chat thread expire, get lost, and turn into "message deleted".

Photos are a backup; the physical piece is the standard. You take photos for the day you cannot explain something. On that day you still have an image with a ruler in it.

Once the order gets bigger, or carries a custom colour, a logo or packaging, take the sample away with you. That is what keeping your own sample means: that one piece is not sent back, you carry it home.

Before you take it, do three things: bag it, label it, photograph it. The label carries the model, the colour and the date you received it. Take one photo of the sample together with its label and put it in email. From then on, this piece is the quality standard for this order.

Whether the factory keeps a copy is not the point on a small order. What you manage is your own piece. Keep it in a dry cabinet, not on the workshop floor, until the warranty on this order ends. Cardboard takes moisture, and things in a bag go yellow. Which piece you pick also matters. Take one at random from the several that were sent, not the best-looking one. Using a display piece as the standard sets the line a height it cannot reach.

The bulk arrives. How do you compare it with your sample?

Put your sample beside the bulk and run five checks. Photograph, measure three points, match colour, count accessories, feel it over. Write each one as a number. This layer is yours alone. You placed the order, you are the consignee, you are the buyer on the contract, and there is no third person between you and the factory. The factory hands over, you compare, and you decide whether it ships.

When you compare, sample on the left, bulk on the right, same phone, same window, same ruler. Pictures and verbal colour descriptions are only supporting evidence.

• Photograph side by side. Sample left, bulk right. One front, one side, one top, same phone, same angle, same window.
• Measure three points. Wall thickness at the thinnest place, outside length, width and height, weight of one piece. Three numbers, written down.
• Match colour. Put both on a sheet of white paper and look at them by the window. Not in the warehouse, not in the car.
• Count accessories. Screws, feet, the wrench. One missing in the sample means two thousand missing across two thousand pieces.
• Feel it over. Burrs on the edges, welds that sit proud, a coating with a gap in it.

Write each line as a number and record it on one sheet. That sheet is the self-check record: which items were checked, the number for each one, who signed it. You can fill it in yourself, or have the factory fill in a copy and send it, and compare the two. "Wall thickness 1.6 mm, sample 2.0 mm" is a conclusion you can negotiate on. "It feels thin" is a sentence that gets pushed back.

If it does not match, do not ship. Refuse it on the spot and make the factory rework or remake it. Do not let a bad batch get on the ship. Once the goods leave the factory, all you hold is a claim letter.

Do the comparison twice, on the same sheet both times. The first time is before shipment, starting with the first carton. You are there in person, or the factory photographs it against the same sheet and sends it to you. The second time is after the goods reach you, when you open a carton again yourself. Do not throw the carton away, do not lose the sample, and take video both times. The photos from the day you open the carton are worth far more than an explanation a week later. Photograph first, then move the goods.

There is one more step before the bulk run. Have the factory send you one piece off the line, which is called a production sample. A production sample uses the real material, the real machine and the real workers. It sits closer to the batch you are about to receive than the piece in your hand. The cost is one more sample fee and a few days. Sampling and sample checks in more detail are in the piece on how to request and evaluate samples.

The first job on a small order is to fix the sample. A PI can be as detailed as you like, and it is still a description. The sample is a physical object you can put on a table and measure.

When do you actually need a contract?

When the order contains something a sample cannot hold, there should be a contract. A sample proves "the thing looks like this". It cannot hold "who owns this thing, who pays when it breaks, what happens if they stop halfway".

Specifically, these cases.

• Moulds and tooling. A mould is the steel or aluminium tool that forms the shape of the product; tooling is the jigs and gauges that go with it. Once the mould is cut, who owns it? Who pays when it is changed? When you stop ordering, does it stay at the factory, get shipped out, or get sold at scrap value? Whoever's floor the mould sits on has the louder voice.
• Your brand and logo. Who may use the artwork, on which categories, until what date, and what happens to the stock and the print plates when the deal ends. Plates are engraved one at a time, and the money is already spent.
• A schedule that runs past 12 months. How many pieces per quarter, when the price is reviewed, which side may end it early, and how the volume already scheduled is counted when it ends. A PI covers one shipment.

One more case has nothing to do with samples and comes from the payment method. An order on a letter of credit needs a contract. An L/C (letter of credit) is a bank paying against documents: you hand the documents to the bank, the bank pays. The bank wants a contract that sets out delivery, documents and deadlines, and a five-line sheet will not pass review.

The amount alone is not the test. Some people sign a contract for a USD 30,000 order; others run a USD 300,000 order on a sample and a PI. Both happen. A small order can still need clauses. 300 pieces with a mould need "who owns the mould" written down more than 30,000 pieces without one.

What a contract is worth is exactly what a sample cannot reach. It writes down "what happens if this falls apart": which country's law, where you argue, how much is paid, whether there is a cap.

These four lines are the floor. The governing law. How a dispute is resolved, arbitration or court, with the body, the place and the language. The scope and the cap on damages for breach. Who owns the intellectual property. Drop one of the four and the contract is half as thick on the day it matters.

Beyond that there is a second ring: what counts as force majeure, who owns the moulds and the drawings, confidentiality, termination. Then warranty and after-sales, and whether the order can be passed to another factory. Not every order gets all of these written.

The law is explicit about a sale by sample. Article 635 of China's Civil Code: the parties shall seal and keep the sample. The goods delivered shall match the quality of the sample and its description. Once you bag the sample, label it and store it, your side has sealed it.

On a small order, a PI plus the sample in your hand covers most arguments: colour, thickness, size, accessories, packaging. What is left over is the territory of a contract.

A bulk order needs one more layer. Both sides sign the sample, write the date, and each keeps a copy. The sample becomes an annex, one page of the contract. Now the sample exists in a second copy, and it sits inside a document both sides have signed. At that point, you are not the only one looking at the sample.

Who should the contract be signed with?

Two routes: you sign directly with the factory, or you sign with a trading company and let it sign with the factory. The difference is not who is more reliable. It is where you fight after something goes wrong, and how much you are willing to pay for that middle layer.

Take direct with the factory first. When you sign with the factory, it is a foreign buyer against a Chinese factory. Suing, serving papers, enforcing: every step crosses a border. Even with a judgment in hand, you apply in China for recognition and enforcement, and that stage takes the most time. You save the middle layer's service fee, and you pay for it with an extra stretch of cross-border time and cost when something goes wrong.

Now the trading company. You sign with the trading company, and the trading company signs with the factory. Both entities sit in China under the same set of laws. If it reaches the legal route, the defendant and the party to be enforced against are both over there. The procedure is shorter. Contract liability travels with it. The company you signed with is the trading company, so delivery dates, quality and documents are its responsibility to you. How it agrees things with the factory is its own business, and you do not have to manage how the two contracts mesh. The cost is one more layer of service fee, and one more person between you and the line. When a specification changes, you go through it first, and then it goes to grind it out with the factory.

That layer has to sit on an entity that exists and can carry liability. Business licence, company bank account, company address, all three matching. An "agent" who only appears in a WeChat group and takes money into a personal account cannot carry that layer.

There is one more easy mismatch. The contract is signed with the trading company, so the money must also be paid to the trading company. One entity on the contract and another on the payment, and both sides can push back when something goes wrong.

A small order usually does not add this layer. A sample plus a PI, as described above, is enough. The question only comes up once you reach the point of signing a contract.

Where you have worked together for years, or the factory was your nomination in the first place, many people sign direct. The price is still that stretch: cross-border time, plus the cost of the enforcement route.

What is a PI on a small order, really?

A PI is the confirmation sheet for this order. It gets you and the factory nodding at the same page: what is bought, at what price, how it is paid, when it is delivered, to what standard it is checked.

PI stands for proforma invoice, the page the factory sends before you pay. It records the terms of this order. Where you go after this order falls apart, and whose rules you argue under, a PI usually does not say.

So what a PI has to settle on a small order is "getting it said clearly". The lawsuit layer is out of its reach. The ten items below each have to be written as something you can check.

1. Both parties. Full company name, address and contact on both sides. The name must match the business licence character for character.
2. Product and specification. Model, material, size with tolerance, key parameters, and the date of the sample.
3. Quantity and over/under shipment. How many of each category and each colour, and the plus or minus you accept, for example ±3%. State whether that option sits with you or with the factory.
4. Unit price, currency, trade term. A trade term is the agreement on who pays freight and who carries the risk. FOB must be followed by a port; "FOB" alone does not make a price.
5. Packaging. Colour box or bag, which language on the label, which language in the manual, how many pieces per carton, how many layers of cardboard, how the shipping marks read.
6. Payment. Full prepayment or deposit plus balance, and which event triggers the balance. On our side we only do 100% T/T in advance — T/T is a bank wire transfer — and production is scheduled only when the full amount has arrived. We do not take credit terms.
7. The delivery date basis. Which event it starts from, and whether it counts working days or calendar days.
8. Inspection. Who checks, at which stage, and which document comes out of the check.
9. Documents. Packing list, invoice, bill of lading (B/L, the document the shipping line or the forwarder signs for the goods), certificate of origin. Say who issues each one.
10. Number and validity. The PI number, which the invoice and the payment both quote. The date the price holds, the date of signature, and "page 1 of 2" on every page.

One more line has to go in: the bulk shall match the sample you confirmed on a given date. That line is the only way a PI pulls a physical object onto paper. The sample sits in a cabinet, the paper sits in an inbox, and this one line connects the two.

Two checks before you pay. The company name on the PI, the name on the bank account and the name on the business licence must be the same company. The account must be a company account. If the names do not line up, stop and ask why. How to check who a supplier is: see finding out who the supplier really is.

Does a scanned copy count as signed?

Yes, provided it is stamped, sent from a company email address, and the original follows by post.

A Chinese company signs with two things: the signature of the legal representative and the company seal. Seals have three common uses. The company seal goes on contracts and external documents. The contract seal is for contracts only and carries the same force as the company seal. The finance seal goes on invoices and statements; it does not belong on a contract.

The person signing should ideally be the legal representative. If not, there must be a written power of attorney. A sales manager's signature on its own is a notch weaker as proof.

If there is more than one page, have the factory apply an edge seal. The stamp sits on the page margin and crosses the seam between two pages. Swap one page in the middle and it shows at a glance.

A scan works because the law treats electronic records as writing. Article 469 of the Civil Code says a data message counts as written form. It must show its content in a tangible form, and it must be retrievable and consultable at any time. Article 14 of the Electronic Signature Law says a reliable electronic signature has the same effect as a handwritten signature or a seal.

How you keep the evidence is concrete. Archive the email as it is; do not convert the attachment into an image. For the photo in the chat, ask for an email copy separately. If the original is beyond the scale of a small order, send it by courier and keep one copy on each side.

Delivery date, inspection, changes: how do you write them without a contract?

One sentence with countable terms, one self-check record, one new version of the PI. None of the three needs a contract, and all three need you to put words down.

Which event starts the delivery date, and who watches it?

Write one event, one number of days, one method of counting.

"30 working days after the prepayment is received" is a term you can check. "Delivery in 30 days" is a sentence you cannot check, because nobody knows which day those 30 days start.

Pick one event only: prepayment received, sample confirmed, packaging artwork confirmed, work restarting after Chinese New Year. Write it into the PI, and do not write two.

There are two ways to count, and you choose one. Working days exclude Sundays and public holidays; calendar days miss nothing. Mix them in one sentence and you get two delivery dates. In our experience factories usually stop for two to four weeks around Chinese New Year, and the dates differ every year. For an order that crosses Chinese New Year, write the stoppage out separately. For example: "the Chinese New Year holiday does not count towards the lead time".

Also write the stop rule. If the clock stops for your reasons (artwork changed, late confirmation, late payment), name the day it stopped and the day it restarts.

Add one line on evidence: within two working days of the event, have the factory confirm the start date in writing. Move that email into your own archive. Only when both sides count from the same day can the rest be discussed.

The date on the PI is set by the factory. Once it is set, watching the line, checking progress and hearing early when a date slips are your own job. When you ask "when can the goods ship", the answer is one you have to ask for.

After production is scheduled, every stage is yours to check: material all in or not, on the line or not, packaging finished or not. If the date you work out differs from the PI, say so early, not on the day the container is loaded.

What does inspection rest on?

A small order rests on two things: comparison with your sample, plus a self-check record. Inspection is work you do yourself.

You are the buyer, the contract is in your name, you are the consignee; between the goods coming off the line and shipping, the only one who can check first is you. Write the check up as a self-check record: which items were checked, the number for each one, who signed it.

A self-check record is a checklist you fill in yourself, not a third-party report. It is the only inspection document you can produce yourself. It says in black and white that the person who did the check says he did it. No third company's name appears on it.

A third-party report is issued by an inspection company you hire separately, and that company's name is printed on it. The two documents prove different things: one says "the person who did it says he checked", the other says "someone from outside came and checked". The difference and how to use each are in the piece on self-check records and third-party reports.

When is it worth paying for a third party? Four signals. The amount has gone up. The order is going into a supermarket or an e-commerce warehouse. The product carries power or touches food. The factory is a first-time partner. Meet one and the money is worth spending.

Write the inspection point clearly: before packaging, on 100% of finished goods, or at loading. Opening a carton after the container door has been sealed is a survey, not an inspection.

What happens if it fails has to be written first too: rework and recheck, a price reduction, or refusal. Choose one, and add who pays storage while the decision is made.

How do you write a change?

Five steps, and none of them can be skipped.

1. Write a change note. One page: old term, new term, effective date, effect on price, effect on delivery.
2. Get a written answer. The other side agrees, or quotes again. Silence is not agreement.
3. Settle the material already bought. Old colour, old cartons, old labels: one side pays for them.
4. Issue a new PI. New version number, new date, signature. Void the old one in writing, add the word "void" to the file name, and do not delete it.
5. Tell the downstream. The inspector, the forwarder booking the space and your own warehouse all need the new version.

The law stands on the side of what is written. Article 543 of the Civil Code: the parties may change the contract by agreement. Article 544: where the changed content is not clearly agreed, it is presumed unchanged. A "yes" in a chat that never reaches a new PI can be denied by the factory afterwards.

Small changes are where money leaks most easily. Change the print on a carton and the plate has to be remade. Change a colour and a batch of material and a machine reset come with it. Add an accessory and the chain gains a factory and a wait. None of that is free, and none of it turns up in a chat thread by itself.

If you really have to claim, what do you hold?

One written claim, plus four attachments. Side-by-side photos of the sample and the bulk, the self-check record or third-party report, the bill of lading and the payment receipt.

A claim letter of one page is enough: what was agreed, what arrived, what you want. Keep the three parts in that order. Attach the photos and documents, and give a reply deadline, for example seven working days.

On a small order, by this stage most of it is talking, not litigating. The harder the material you can put on the table, the faster the talk goes. Your sample, photos with a ruler, a PI with the specification written out, the bank slip, the video from the day you opened the carton. What the factory wants is the same thing: something it can show its boss.

On a big order, by this stage you follow the clauses. An arbitration clause has to name the body, the place, the language and the rules. The words "arbitration in China" are enough for lawyers to argue over for half a day.

Arbitration travels across borders better than a court judgment. Under the New York Convention, contracting states shall recognise and enforce each other's arbitral awards. A court judgment does not get that treatment between most trading partners.

The clock is running too. Article 594 of the Civil Code: the limitation period for litigation or arbitration over an international sale of goods contract is four years. It counts from the day you knew or ought to have known that your right was infringed. Four years sounds long; evidence will not wait four years.

One more that is easy to miss. Article 507 of the Civil Code says the dispute clauses survive. If a contract does not take effect, is void, is revoked or is terminated, those clauses still stand. Even if the whole contract is voided, the line in it about where you argue still holds.

The documents side, as well. The bill of lading is issued by the shipping line or the forwarder, not by the factory. DDP is the delivery basis where the seller handles import clearance and duties; we do not take that one. The commercial documents the factory gives you are the invoice and the packing list. That decides which sheets in the stack are yours, and which you have to go and ask the forwarder for.

This section sets out general principles, not legal advice. How the clauses should read depends on your country, the amount and the counterparty. One hour with a lawyer before a large prepayment is cheaper than a year of it after something goes wrong.

Do-this checklist

1. First work out whether this order contains something a sample cannot hold: a mould, your brand, a schedule past 12 months, a letter of credit. If any one is there, prepare a contract.
2. If a contract is needed, first decide who signs it: a trading company, or the factory direct. For a trading company, check its business licence, company account and address; for the factory direct, budget the cross-border time and cost.
3. Photograph the sample before you order: six angles, a ruler beside it, daylight, stored in email.
4. For a custom model, or an order with a bigger amount, take the sample away: bag it, label it, photograph it, keep it yourself.
5. Take one at random from the several that were sent as the standard, not the display piece.
6. Write the sample date into the PI, and add one line: "the bulk matches the sample confirmed".
7. On a bulk order, turn the sample into a contract annex: both sides sign, each keeps one copy, the date written on it.
8. Write the ten PI items as things you can check, one by one: parties, specification, quantity tolerance, unit price and term, packaging, payment, delivery basis, inspection, documents, number and validity.
9. Check that the PI name, the licence name and the account name are one company, and that the account is a company account.
10. Write the delivery date as one event, one number of days and one method of counting, plus the stop rule; after production is scheduled, ask for progress at each stage.
11. Write inspection clearly: who checks, when, which document comes out, and what happens if it fails.
12. Run a change through five steps, issue a new PI, and void the old one in writing.
13. Get the seal right: company seal or contract seal, an edge seal across multiple pages, and a signer with authority.
14. Send the scan from a company email, post the original after it, and archive the email as it is.
15. When the bulk run finishes, compare it yourself: side by side, three measurements, colour, accessories, feel; if it does not match, refuse it and keep it off the ship. After it reaches port, open a carton yourself again.
16. Write every result as a number, not as a "feeling".
17. If it really goes wrong: a one-page claim letter, four attachments, a reply deadline.
18. One hour with a lawyer before a large prepayment, not after.

With an agent, receiving the goods, signing the contract and inspecting are the agent's work, and you only place the order and confirm. This piece is about the route where you do it yourself.

Related reading

• How to pay a Chinese supplier: T/T and L/C
• Finding out who the supplier really is: factory, agent or forwarder
• How to request and evaluate samples

Related products

• Yiwu sourcing service
• Storage racks

Sources

• Supreme People's Procuratorate — Civil Code of the PRC, Book Three Contracts, Articles 469, 507, 543, 544, 594 and 635 (text reproduced by Xinhua) — https://www.spp.gov.cn/spp/ssmfdyflvdtpgz/202008/t20200831_478413.shtml — checked 2026-10-28. Text (Article 635): the parties to a sale by sample shall seal and keep the sample and may describe the quality of the sample; the goods delivered by the seller shall be of the same quality as the sample and its description.
• National People's Congress — Electronic Signature Law of the PRC, Article 14 — http://www.npc.gov.cn/zgrdw//npc/////////xinwen/lfgz/zxfl/2004-08/30/content_332326.htm — checked 2026-10-28. Text: a reliable electronic signature has the same legal effect as a handwritten signature or a seal.
• United Nations Commission on International Trade Law (UNCITRAL) — Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) — https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards — checked 2026-10-28. Text: "It obliges Parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards."
• YIWU RUIHA TRADING CO.,LTD. — service terms, confirmed first-hand with staff — checked 2026-10-28. Text (excerpt, `…` marks omitted parts): "… 100% T/T in advance, no credit terms; … we issue commercial documents only, we do not act as a freight forwarder and we do not offer DDP; the only inspection document we issue is our own self-check record."

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