The first step in risk management for bulk commodity trade is to proactively address potential risks before entering into contracts. To minimize risks, businesses must adopt proactive measures to lower, avoid, share, and control risks based on different situations.
Lost contact with your Chinese supplier during a pandemic? Discover how one company revived communication, navigated cost challenges, and secured delivery.
The post focuses on the legal application of installment payments, risk management strategies for delayed payments, the significance of reserving ownership rights, and the impact of market factors on commodity prices.
Directors of foreign companies can sign contracts with Chinese counterparts, and the absence of the foreign company’s stamp won’t invalidate the contract, except in cases where specific agreements or the foreign company’s articles of association impose restrictions on the directors’ signing authority.
You must be alert to fraud when the following situations occur.
The director of the foreign company can sign.
When you buy tailor-made products in bulk from a Chinese manufacturer, you need to get the samples first.
Doing business with a large business trader may be better than directly with a small manufacturer.
Be Cautious when you use a contract template, otherwise, this may lead to an awkward situation where you have to apply for arbitration to an institution out of nowhere.
No. Sellers shall pay the cost of Terminal Handling Charges (THC) according to the International Rules for the Interpretation of Trade Terms 2010 (2010年国际贸易术语解释通则) (“Incoterms 2010”).
When a Chinese enterprise is adjudged bankrupt, it generally means that its assets are insufficient to pay off all its debts, so its shareholders cannot recover their capital contributions through bankruptcy procedures.
If you don’t have a contract with the seal of this Chinese company, this Chinese company may deny having transacted with you.
This is because conflicting clauses in the different versions will be deemed to have no effect. Therefore, you should review each clause of the Chinese contract carefully.
The answer is YES, as long as the international sales of goods contracts are concluded between parties whose places of business are in different Contracting States of the United Nations Convention on Contracts for the International Sale of Goods (the “CISG”). In such cases, the Chinese courts shall apply the Convention automatically.
In China, the official company seal or stamp is a symbol of corporate power.
You should terminate the contract before considering whether to claim compensation from him.
If the content of the purchase order or contract entered into between you and the Chinese company is very simple, Chinese court may refer to China’s Contract Law to interpret your transaction between the Chinese supplier.
You’d better not turn your back on your deals with Chinese suppliers. You shall terminate your contract in accordance with reasonable procedures.
When you make payments to Chinese suppliers, they may ask you to pay to several different bank accounts that may not belong to themselves.
