What should a contract with a Chinese supplier include?

A supply contract earns its keep on one day: the day something has gone wrong and the relationship is no longer cooperative. Almost every clause that matters then is one that looked like boilerplate when it was signed. This is not a substitute for having a contract drafted or reviewed by a qualified lawyer — it is what to make sure is being addressed.

The parties

Name the supplier by its registered Chinese name and its Unified Social Credit Code, not by its trading name or its marketplace storefront. A contract with an entity that does not exist under that name is a poor starting position, and the mismatch between who quoted, who invoices and who banks is one of the more common findings in a supplier file.

What "quality" means, in writing

• The specification, as an annexed document with a version and a date.
• The approved sample: which physical unit, signed and dated, and who holds a counterpart.
• Tolerances for the attributes that actually matter, expressed as numbers where numbers exist.
• Applicable standards and certifications, named by their reference — and whose obligation it is to maintain them.
• The inspection right: who may inspect, at what stage, on what notice, and what happens on a fail.

Payment

Payment terms are where commercial leverage lives. The relevant questions are what proportion is paid before production, what triggers the balance, and whether any payment is conditional on an inspection result rather than on a shipping date. Also state the account: payment to be made only to an account held in the supplier’s registered name, and no change to banking details to be actioned without verification by a separate channel.

Governing law and dispute resolution

This is the clause most often copied from a template and least often thought about. The question is not which forum sounds most reassuring — it is which decision could be enforced against the supplier’s assets. Where those assets are in mainland China, an award or judgment must be recognised and enforced there. China is a party to the New York Convention on arbitral awards, and its courts have a route for recognising foreign arbitral awards that they do not have for many foreign court judgments.

Option	Practical consideration
Chinese court, Chinese law	Direct enforcement where the assets are; proceedings in Chinese
Arbitration seated in China (e.g. CIETAC)	Domestic award, straightforward to enforce; established institution
Arbitration outside China	Enforceable in China via the New York Convention; adds a recognition step
Foreign court	Enforcement of a foreign judgment in China is materially harder than enforcement of an award

Language

A bilingual contract needs a prevailing-language clause, and both versions need to actually correspond. Two texts that diverge, with a clause saying the Chinese version governs, is a contract in a language you have not read. Which version prevails is a separate answer on this site, and it is worth reading before signing rather than after.

The clauses people forget

• Tooling: ownership, location, and release on termination.
• Intellectual property: your drawings remain yours, and may not be used for other customers.
• Subcontracting: whether production may be moved to another factory, and whether you are told.
• Confidentiality that covers your customer list and your specification, not just "the agreement".
• Term, termination, and what happens to work in progress and materials already bought.