dan harris harris & moure, pllc usa | china| mongolia asia product outsourcing done right
TRANSCRIPT
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Dan HarrisHarris & Moure, PLLCUSA | China| Mongolia
www.harrismoure.com www.chinalawblog.com
Asia Product Outsourcing Done
Right
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The Keys
Good manufacturer
Good contract
Good IP protection
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Good Manufacturer
• Due Diligence
• Due Diligence
• Due Diligence
The company's legal representative signed it. Chinese law provides that a company's legal representative has apparent authority to bind the company. This means that even if that representative lacks the actual authority to bind the company (maybe because the board of directors or the shareholders never gave the representative the authority to contract with you), the legal representative's signature will bind the company. There is, however an exception to this and that is when you know that the legal representative lacks the authority to bind the company.The contract is appropriately sealed. An appropriate seal (oftentimes called a chop) is applied to the contract. It does not matter who applies the seal, so long as it is the right seal. This means it must be sealed either with a contract seal that sets forth the name of the company or, as is more commonly done, with the Company Seal. Each Chinese company has only one company seal (no copies).Chinese companies are notorious for trying to get out of contracts by claiming they never actually signed them or that they were signed without the proper authority and so if your contract is big enough and important enough, you should consider doing all of the following to minimize even further the likelihood of the Chinese company seeking to get out of your contract: A signature from the company's legal representative. Of course, you must first confirm from the company's business license who exactly is the company's legal representative.A resolution from the company's board explicitly approving the contract and authorizing the legal representative to sign it. The affixation to the contract of the company seal or the company's contract seal.
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Good Contract
Why bother?
What about corruption?
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The Right Contract
NDA vs. NNN
OEM Agreement
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The Good Contract• In writing• One language• Excruciating detail• Liquidated damage• Attorneys’ fees?• Dispute resolution• Sealed
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Where to Sue?
Most countries do not enforce U.S. judgments.
Most countries do enforce
international arbitral awards.
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Suing In China
• Document-based• Cheap and fast (unless…) • Nobody settles• Low damages
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Arbitration Clause • Where?• What law? • Institutional or ad hoc? • Fees? • Language?• Arbitrators’nationality?
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Where to Arbitrate
• United States as no-go
• Hong Kong/Singapore/London Vancouver, New York
• CIETAC: Not so bad
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CIETAC: Contract Clause
•Specify English language•Specify non-Chinese arbitrator(s)•Discovery•Injunctive relief•Third parties•Notice
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Protect your IP
• Trademark
• Patent
• Copyright
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Dan Harris
Harris & Moure, pllcUSA | China | Mongolia
www.harrismoure.com www.chinalawblog.com