supply contract china english chinese · web viewnº of pages: 16 + 6 (guide negotiating contracts...

This contract, which is in two languages (English-Chinese), is used when a foreign company contracts the supply of products at certain prices with a Chinese manufacturer over a certain period of time (one year or more). The contract includes clauses regarding quality, amounts and orders, prices, payment conditions, claims and resolution of problems, inter alia.

The contract is adapted to the uses and commercial practices of the Chinese market and Chinese contract law (People's Republic of China Contract Law). Together with the contract, we provide a guide in English on Negotiating Contracts in China.

This agreement is used for contracting the manufacture of standard products without excessive value added in China. If it is for manufacturing customised products with specifications regarding the materials used, packaging and wrapping, designs and own models, manufacturing equipment, and protecting the intellectual property rights of the products (patents, trademarks), it is preferable to use the OEM Manufacturing Contract.

LEGAL WARNING

Depending upon your particular situation this contract might not meet your needs and requirements. In case of doubt, you should consult a legal advisor.Global Negotiator as publisher and copyright holder of this contract disclaims all warranties, whether express or implied, respecting the legal content of this contract. For any claims arising out or in connection with the use of this contract, Global Negotiator shall be limited to a refund of the purchase price.

INDEX

PartiesClauses

1. Agreement to supply2. Duration3. Quality4. Quantities and

ordering procedures5. Deliveries risk &

ownership6. Prices 7. Payment terms8. Intellectual Property

Rights9. Claims 10. Termination11. Force majeure12. Assignment and

subcontracting13. Relationship of the

parties 14. Notices15. Amendments and

additions 16. Law and jurisdiction17. Language

SignaturesSchedules

GUIDE NEGOTIATING CONTRACTS IN CHINA

SUPPLY CONTRACT FOR CHINA (ENGLISH-CHINESE)

Nº OF PAGES: 16 + 6 (Guide Negotiating Contracts in China)FORMAT: WordLANGUAGE: English-Chinese

http://www.globalnegotiator.com/international-contracts.html

DATE 日期: ........................................................................................................................................................

[Insert name of the Company]

[ 公司名称 ] ("Company")

(" 公司 ")

[Insert name of the Supplier]

[ 供货商名称 ] ("Supplier")

("供货商 ")

SUPPLY CONTRACT

供应合同

THIS CONTRACT is made the day: ................................................................................................

本合同签署日期：BETWEEN:同：................................. [company legal name], a company incorporated in and existing under the laws of ..................., whose registered office is at ..................................... [address, city and country] ("the Company”),

................................. [公司依法登记的名称], 公司依照 ................... 法成立并存在, 注册登记地

..................................... [地址、城市、国家] ("公司"],

AND:

和:

................................. [company legal name], a company incorporated in and existing under the laws of the People´s Republic of China, whose registered office is at ..................................... [address, city and country] (“the Supplier”).

.................................[公司法定名称]，于注册成立，下的现行法律公司中国人民共和国，其注册办事处位于.................................[地址，城市和国家] ("供货商"),

IT IS HEREBY AGREED as follows:

协议内容如下 :

1. AGREEMENT TO SUPPLY

供应协议1.1 The Supplier will sell and deliver and the Company will buy the products specified

in Schedule 1.

供应商负责销售和交付，公司则购买附表 1 中的产品。1.2 The list of products in Schedule 1 may be amended by written agreement during the

life of this Contract.

附表 1 中的产品清单可在合同期内以书面协议修订

2. DURATION

合同期间

© globalnegotiator.com 2

2.1 This Contract is for an initial period of .......... [1, 2, 3] years commencing on ..............[date].

本合同自..............[日期]起有效期为.............. [1, 2, 3]年2.2 At the end of the initial period the Contract will continue on a yearly basis unless it

is terminated by either Party giving not less than .......... [1, 2, 3] months written notice to the other to expire at the end of the initial period or on any subsequent anniversary of the last day of the initial period.

合同期满将会以年为基础继续有效，除非任何一方在合同终止前或在任意合同年的最后一天提前.......... [1, 2, 3]月以书面形式通知另一方。

3. QUALITY

质量3.1 Products to be supplied under this Contract must conform to the description and

specifications contained in Schedule 2.

依据该合同所供应的产品必须符合附表 2 中的描述和说明。3.2 The Company must notify the Supplier promptly in writing if it becomes aware of

any Products which do not conform to the requirements set out in this Contract. The Company will not be obliged to pay for non-conforming Products and the Supplier will be responsible for their removal and replacement with Products that conform to the requirements of the Contract.

一旦产品不符合合同要求则公司应立即以书面形式告知供应商。公司不承担不合格产品的费用，供应商应负责不合格产品的拆卸和修复以达到合同要求。

3.3 Where appropriate, independent inspection and testing of Products will be carried out at agreed intervals with an independent third Party appointed by the ..............[Company or Supplier] and approved by the .............. [Supplier or Company]. A copy of every test report will be made available to the ............. [Company or Supplier] .............. by the .............. [Supplier or Company].

针对产品进行的适当且独立的监督和检测应由 ..............[公司或供应商 ]指定且由..............[公司或供应商]同意的独立第三方实施。每一个检测的复印件均由 ..............

[公司或供应商]交给..............[公司或供应商]。3.4 The costs of such inspections and tests:

监督和检测的成本：Alternative A. Will be borne by the Supplier.

选项一. 由供应商承担


Alternative B. Will be borne by the Company

选项二. 由公司承担Alternative C. Will be borne equally by the Supplier and the Company.

选项三. 由供应商和公司平均承担

4. QUANTITIES AND ORDERING PROCEDURES

数量和订购流程4.1 The minimum and maximum quantities of Products which the Company will order

in each Contract Year are set out in Schedule 3. A "Contract Year" is the 12 month period commencing on the date established in Clause 2.1 and on each anniversary of that date.

公司会在每合同年将产品的最小和最大数量列明于附表 3 中。合同年即指在 2.1 条款中成立的日期开始以 12 个月为周期的日期。

4.2 The Company will provide a written forecast of its anticipated annual requirements at least 30 days before the commencement of each Contract Year and will also provide regular written quarterly forecasts of its requirements on ................... [1 January, 1 April, 1 July and 1 October] each year. These forecasts will be updated as circumstances require.

公司在每一合同年开始前至少提前 30 天向供应商提供每年期望要求的书面预报，同时公司还会在每年的...................[1 月 1 日、4 月 1 日、7 月 1 日和 10 月 1 日]提供书面的季报。这些预报依情况的要求随时更新。

4.3 Products will only be supplied under this Contract against orders placed by the Company. Each order must be in writing specifying the number and type of Products required and the proposed delivery date(s). Every order must be placed at least ....... [30, 60, 90] days before the delivery date. The Company may vary an order in writing at any time up to ........[30, 60] days before the first delivery date specified in the order.

产品只能以公司依据合同发出的订单作为提供依据。每一个订单需以书面形式写明产品的数量和型号以及交付日期。每个订单需在交付期前至少....... [30, 60, 90]天发出。公司可在订单中写明的第一交付日期前的 ....... [30, 60]天以书面形式变更该订单。

4.4 The Supplier will not be obliged to deliver more than the maximum annual or monthly quantity specified in Schedule 3. The Company must obtain the Supplier's


written acceptance of any order in excess of the maximum monthly or annual quantity.

供应商没有义务交付比附表 3 中列明的每年或每月最大需求量更多的产品。公司若订购超过每年或每月最大数量的产品则必须得到供应商的书面同意。

5. DELIVERY RISK & OWNERSHIP

交付的风险和所有权5.1 The Products will be delivered by the Supplier to the Company at the delivery

points specified in Schedule 4. This may be changed by agreement.

供应商按照附表 4 中列明的方式向公司交付产品，交付方式可由协议变更。5.2 Where the delivery point is at the premises of the Supplier, the Company will be

responsible for collection and loading of Products and will from that point be responsible for insurance of the Products.

若产品的交货地点在供应商所在地，则公司负责收货和装货以及以该地点为起点为产品投保。

5.3 When the delivery point is at the premises of the Company or some other location which requires the Supplier to arrange transportation of the Products, the Supplier will be responsible for insurance of Products in transit and responsible for unloading Products from the delivery vehicle at the delivery point.

若交货地点在公司的所在地或其他需要供应商安排运输的地方，则供应商负责在运输途中的保险和在交货地点从运输车辆上卸货。

5.4 All deliveries will be made during normal working hours of the Company, unless otherwise agreed in writing.

所有的交付需在公司的正常工作时间内进行，除非得到书面同意。5.5 Ownership of and risk in the Products will pass to the Company from the Supplier

at the delivery point either when Products are loaded onto the vehicle for which the Company is responsible or unloaded from the vehicle for which the Supplier is responsible, whichever is applicable.

自供应商在交付地点将货物交付给公司时起，无论此时是公司负责装货还是供应商负责卸货，货物上的所有权和风险都转嫁给公司。

5.6 The Supplier will arrange for packaging and labelling of the Products in accordance with procedures agreed in writing with the Company from time to time. The Supplier will also provide such documentation as may be appropriate to enable the Products to be delivered to the delivery point.


供应商应随时按照公司的书面同意负责产品的封装并贴标签。供应商应提供所有文件以便使产品顺利的在交付地点交付。

5.7 If the Company fails to take delivery of Products on the date fixed for delivery, any

costs incurred by the Supplier in storing them will be reimbursable by the Company on demand and risk in Products will pass to the Company.

若公司未能在交付日期取货，由供应商引起的任何储藏费用由公司及时补偿，产品上的风险也转移给公司。

6. PRICES 价格

6.1 Prices of Products at the date of this Contract are shown in Schedule 1. These prices include transportation to the delivery point.

自本合同之日起，产品价格列于附表 1 中。这些价格包括到交付地点的运输费用。6.2 Prices will be subject to adjustment at the commencement of each new Contract

Year.

价格在每一个合同年开始进行修订。Alternative A. A formula to determine new prices is shown in Schedule 5.

选项一. 决定新价格的计算公式列于附表 5中Alternative B. New prices will be adjusted through negotiation and agreement during ....... [1, 2, 3] months before the commencement of the new Contract Year. In fixing any new prices, the Supplier will provide the Company with details of cost increases and other relevant data. Both Parties will act in good faith in these negotiations.

选项二. 新价格应在合同年开始前的 ...................................................... [1, 2, 3] 月通过协商和协议调整。在确定新价格时，供应商应向公司提供关于成本增加的明细和其他相关数据。双方在协商中都应做到诚信。

6.3 Prices applying at the time that negotiations commence will apply until a price change is agreed. If within ........ [30, 60] days from the commencement of a Contract Year, no agreement on a change in price has been reached, the Supplier will have the right to give ........ [30, 60, 90] days notice to terminate the Contract.

价格适用于自协商开始至价格变更起止。若自合同年开始的 .................. [30, 60]天内，双方在价格的变更上没有达成一致意见，则供应商有权通知公司在.............. [30, 60,

90]天内终止合同。


6.4 When the Company buys Products for resale, it will be free to fix its own resale prices.

公司购买产品用于零售的，则公司可自由针对该零售价定价。

7. PAYMENT TERMS

支付条款7.1 Alternative A. The Supplier will invoice the Company at the end of each calendar

month for the quantity of Products supplied during the month. Each invoice will show the description, quantity and date of delivery of all Products supplied. Payment will be due ....... [30, 60, 90] days from the invoice date.

选项一. 供应商应在每月底向公司出具本月提供的产品数量的发货单。每张发货单应包括所有提供产品的描述、数量和发货日期。公司在收到发货单后的 ........... [30,

60, 90]天内支付货款。Alternative B. The Company will establish a revolving letter of credit in favour of the Supplier prior to the first delivery date for Products under this Contract. The letter of credit will be on terms acceptable to the Company and will be confirmed by a bank in the Supplier's territory. The letter of credit will be maintained at a value agreed between the Parties as being sufficient to meet the estimated cost of Products due for delivery in each month. At the end of each month the Supplier will submit an invoice to the confirming bank (with a copy to the Company). Each invoice will show the quantities and dates of delivery of all Products supplied during the month. Payment will be due ........ [30, 60, 90] days from the date of the invoice.

选项二. 公司为了方便供应商，在合同规定的第一次交付日期前会开立循环信用证。循环信用证的条款应被公司接受，且应由供应商所在地的银行确认。该信用证的金额应由双方同意，保持在能足够满足由每月交货所带来的产品的估算成本。月底供应商应向保兑银行递交发货单（同时交公司一份）。每张发货单应包括每月所有提供产品的数量和发货日期。公司在收到发货单后的 ........ [30, 60, 90]天内支付货款。

7.2 The Supplier will upon request provide the Company with copies of delivery notes and other relevant data to support invoices which are submitted.

供应商应配合公司提供发货记录复印件和其他相关数据来支持已递交的发货单。7.3 The Supplier will be entitled to suspend delivery of any order for Products if any

payment for Products already delivered is outstanding for more than .......[30, 60, 90] days after the date upon which it became due.

若供应商在应付款日后的.......[30, 60, 90]天仍未收到已发货产品的货款，则其有权对任何订单中的产品延迟发货。


8. INTELLECTUAL PROPERTY

知识产权8.1 The Company shall choose the model and design of the Product and provide the

Specification and special function requirements for the product to the Manufacturer. The Manufacturer shall develop and manufacture the Product independently according to the Company's requirements.

公司应选择产品的模型和设计方案并向制造商提供产品说明书和对产品的特殊功能要求。制造商应按照公司的要求独立开发和生产产品。

8.2 Each Party shall retain exclusive ownership and control of its background Intellectual Property Rights (“IPRs”), which existed before the execution of this Contract. No license or any other right, related to any Intellectual Property Right of the Company shall be deemed granted when the Company provides the Specifications, special function requirements for the Product, and design and model of the products to the Manufacturer. Such Specifications and function requirements provided by the Company shall only be used by the Manufacturer for the purpose of this Contract and no other purpose.

双方都应保留对背景知识产权的排他所有权和控制权，该背景知识产权在合同执行前已经存在。当公司向制造商提供产品模型、设计方案、产品说明和提出其他特殊功能要求时，与公司的知识产权相关的其他证照或权利不会被视为允许实施的。公司提出的产品说明和功能要求仅用于本合同的目的不能用于其他目的。

8.3 The Company grants to the Manufacturer a non-exclusive and indivisible right not capable of being transferred or sold, either voluntarily or by law, to use and supply the trademarks of "the Company", on the Company assigned Packaging Materials or the Products. The use of the trademarks of the Company shall be allowed only in a form previously approved by the Company in writing.

公司允诺制造商在产品包装或产品上使用和提供本公司商标的非排他和不可分割的权利，该权利不会随意或因法律而被交换和转让。只有在公司预先书面同意的情况下才能使用公司商标。

8.4 The Products shall not bear any brand name or logo that identifies the Supplier. The Company may incorporate to the Products or ask the supplier any brand name or logo that is properly registered on behalf of the Buyer.

产品不会标注供应商的商品名称或商标。公司可能会代表买方整合或征求供应商任何已适当注册的商品名称或商标。


9. CLAIMS 声明

9.1 If the Company becomes aware of any claim or potential claim in respect of defective product liability arising from a delivery of any Products it shall immediately inform the Supplier in writing providing all necessary information/documentation to enable the Supplier to take any appropriate action. The Supplier may require the Company to give all reasonable assistance, at the Supplier’s cost, to enable the Supplier to defend its reputation. The Company shall not, without the prior written authorisation of the Supplier settle any such claim.

若公司知道或可能知道有关不合格产品引起的任何索赔，公司应立即以书面形式告知供应商并提供所有必要的信息或文件，以便供应商采取任何适当的行动。为了维护声誉，供应商可以要求公司给予任何合理的协助，费用由供应商承担。公司不得在未得到供应商书面授权的情况下处理任何此类的索赔。

9.2 The Company undertakes that it will not make any misleading claims or produce any misleading advertising material in respect of the Products.

公司保证不得做针对产品做出任何误导性陈述或生产任何有误导性的广告材料。10. TERMINATION

合同终止10.1 The Supplier may terminate this Contract by notice to the Company if the Company

is overdue in making any payment for more than ........ [60, 90, 120] days, or if the Company commits any material breach of this Contract and (in the case of a breach capable of remedy) fails to remedy the breach within ....... [10, 20, 30] days of being requested to do so in writing.

供应商在公司超过付款期限多于........................ [60, 90, 120]天后仍未付款，或公司出现实质违约且未能在........... [10, 20, 30]天内采取补救措施，供应商可书面通知公司合同终止。

10.2 The Company may terminate this Contract if the Supplier fails to perform its obligations or commits a material breach of this Agreement and (in the case of a breach capable to remedy) fails to remedy the breach within ........ [10, 20, 30] days of being requested to do so in writing.

公司在供应商不能履行义务或实质违约且在........ [10, 20, 30] 天内未采取任何补救措施时可以书面形式通知供应商终止合同。


10.3 Either Party may terminate this Contract by notice if the other Party becomes insolvent or has a receiver or liquidator appointed or enters into an arrangement with its creditors.

任何一方因另一方破产或有被指定的接受人或清算人，或进入与债权人的相关安排中，都可以终止合同。

10.4 The Supplier may terminate this Contract in the circumstances contemplated by Clause 6.3.

供应商可依据 6.3条款的规定终止合同。

11. FORCE MAJEURE

不可抗力11.1 The Supplier shall not be liable to the Company for failure to deliver nor shall the

Company be liable to the Supplier to take Products ordered under this Contract where:

当出现以下情况时，供应商不承担未能交付货物的责任或公司不承担不能取货的责任：11.1.1 the failure is due to a cause outside that Party's control including, but

not limited to, acts of nature, war, terrorism, sabotage, fire, explosion, flood, action of any governmental authority, embargo, failure of raw materials supply, strike or labour dispute (except of the workforce of the Party claiming force majeure), and

出现此种状况是因为不在双方的控制之内，包括但是不限于：自然灾害、战争、恐怖行动、破坏行为、火灾、爆炸、洪灾、政府行为、禁令、原材料供给短缺、罢工或劳动争议（除了公司或供应商一方的工人申请不可抗力、而

11.1.2 it gives notice of the event as soon as practicable to the other Party.

及时通知另一方A Party claiming force majeure must use all reasonable efforts to avoid or mitigate the effect of the force majeure event.

一方申请不可抗力的应尽一切努力避免或减轻不可抗力所带来的后果。11.2 If a force majeure event continues for more than ......... [90, 120, 180] days either

Party may give notice to the other to terminate this Contract.

不可抗力持续多于......... [90, 120, 180]天，任何一方可通知另一方终止合同。


12. ASSIGNMENT AND SUBCONTRACTING

任务和分包12.1 Neither Party shall assign any of its interests in this Contract without the

other’s prior written consent.

未经对方的书面同意，任何一方不得分配其合同项下的利益。12.2 The Supplier shall not subcontract any of its obligations to any third party

without the prior written consent of the Company.

供货商未经公司的书面同意，制造商不得将其合同下的义务分包给第三方。

13. RELATIONSHIP OF THE PARTIES 合同方关系

13.1 Nothing in this Contract shall constitute, or be deemed to constitute, a partnership between the Parties, nor, except as expressly provided, shall either Party

constitute, or be deemed to constitute, the agent of the other for any purpose.

本合同的任何内容不构成或不应视为构成合同方的合作关系。除非明确表述，一方不得视为或被视为另一方的委托代理人。

13.2 Subject to any express provisions to the contrary in this Contract, the

Manufacturer shall have no right or authority to, and shall not, do any act, enter into any contract, make any representation, give any warranty, incur any liability, assume any obligation, whether express or implied, of any kind on

behalf of the Company or bind the Company in any way.

除本协议有任何明确的相反规定外，制造商无权也不应代表公司或对公司产生约束力地签订合同、做出陈述、提供保证、产生责任、承担义务，不论此种行为是明示还是暗示。

14. NOTICES

通知Any notice or communication required or permitted to be given under this Contract or in connection with the matters contemplated hereunder shall, except where otherwise specifically provided, be in writing in the English language.

在本合同或与以下预期事项相关的任何被要求或允许而发出的通知或交流，除特殊情况外，均以英语书写。


Any such notice shall be addressed as provided below. The address and other details of the Parties are:

通知上的地址如下所述，合同双方的地址和其他信息如下：SUPPLIER: ..................................................................................................

供货商:

Name of the Representative: ..............................................................

法定代表人:

Postal address: .....................................................................................

邮寄地址:

Fax number: ..........................................................................................

传真:

Email address: ........................................................................................

邮件:

COMPANY: .........................................................................................

公司:

Name of the Representative: ..................................................................

法定代表人:

Postal address: .........................................................................................

邮寄地址：Fax number: ..............................................................................................

传真：Email address: ............................................................................................

邮件：

15. AMENDMENTS AND ADDITIONS

修正和附加No amendment or addition to the present Contract shall be valid without written agreement by both Parties.

在未经双方书面同意的情况下不得对现有合同进行修正或添加。

16. LAW AND JURISDICTION

法律和司法管辖权The Parties shall exercises their best efforts to resolve by negotiation any and all disputes, controversies or differences between them arising out or relating to this Contract.


合同双方应尽量协商解决由合同引起的或与合同相关的所有争议、矛盾和分歧。Alternative A选项一If the dispute is not resolved by direct negotiation, it will be finally settled by legal proceedings and in accordance with the law of ................ [insert name of Company´s country or China], unless the ....................... [Company or Supplier] as plaintiff wishes to pursue legal proceedings within the jurisdiction of the other Party’s headquarters.

如果争议未能通过直接协商解决，将最终通过法律途径解决。依据................法律［公司所在国家或中国］，除非作为原告的...............［公司或供货商］希望以另外一方总部所在地的法律为依据。Alternative B

选项二If the dispute is not resolved by direct negotiation, it will be finally settled by:

如果争议未能通过协商解决，将通过以下方式解决：Alternative B.1

选择 B.1

Arbitration in .............. [insert name of Company´s country ]. There will be an Arbitration Tribunal comprising of three arbitrators. The arbitral award is final and binding on the Parties and enforceable in the Courts of the countries in which the Company and Supplier are located. The place of arbitration shall be ............... [insert city] and the proceedings shall be carried out in the ................. [English or Chinese] language

在..............［公司所在国家名称］仲裁。仲裁法庭由三位仲裁员组成。仲裁结果是最终的，对合同双方都有约束力，在公司和供应商所在国的法庭能执行。仲裁地点在..............[城市]，仲裁程序以..............[英语或中文]进行。Alternative B.2

选择 B.2

Arbitration in accordance with the rules of the China International Economic and Trade Arbitration Commission (CIETAC) in effect at the time of applying for arbitration. The arbitral award is final and binding on the Parties and enforceable in the courts of the countries in which the Company and Supplier are located. The place of arbitration shall be ............... [insert city] and the proceedings shall be carried out in the ................. [English or Chinese] language.


仲裁应依据申请仲裁时中国国际贸易经济委员会的仲裁规则进行。仲裁结果是最终的，对合同双方都有约束力，公司和供货商所在国的法庭能执行。仲裁地点在..............[城市]，仲裁程序以..............[英语或中文] 进行。17. LANGUAGE

语言The whole text of the present Contract and all documents derived from it, including the Schedules, have been written in English and Chinese, both versions being deemed authentic, but for legal purposes the text in ............. [English or Chinese] is to be given priority of interpretation.

本合同的全部内容及由此衍生的所有文件（包括所有附表）均应以中文和英文两种语言书写，这两种版本都是真实可信的。但法律上以.............［英文或中文］解释为主。Both Parties declare their conformity to the present Contract, which is signed in ...... copies, each of which shall be considered original.

合同双方对合同协商一致，此合同共有......份，每份均为原件。This Contract enters into force the on date specified above.

本合同自上述日期起生效。

SIGNED by a duly authorized representative of the Company and of the Supplier.

由公司和供货商合法授权的代表人签署。SIGNED by 签字: .........................................................................................................

For and on behalf of the Company 公司代表Position 地点: ..............................................................................................................

Date 日期 : ....................................................................................................................In the presence of 见证人 : ....................................................................................

SIGNED by 签字: ..........................................................................................................

For and on behalf of the Supplier 供货商代表Position 地点: ..............................................................................................................

Date 日期 : .....................................................................................................................In the presence of 见证人: ......................................................................................


SCHEDULE 1附表 1

PRODUCTS AND PRICES (CLAUSE 1 AND 6)

产品和价格（条款 1 和 6）Attached list of products and prices.

附件为产品和价格清单

SCHEDULE 2附表 2

DESCRIPTION AND SPECIFICATIONS OF PRODUCTS (CLAUSE 3 AND 1)

产品描述和说明（条款 3 和 1）Attached description and specifications of products

附件为产品的描述和说明

SCHEDULE 3附表 3

MINIMUM AND MAXIMUM QUANTITIES PER CONTRACT YEAR (CLAUSE 4)

每合同年的最大及最小数量（条款 4）Attached minimum and maximum quantities of each product per year contract.

附件为每合同年的产品最大和最小数量

SCHEDULE 4附表 4

DELIVERY POINT (CLAUSE 5)

交货地点（条款 5）Insert delivery place as precisely as possible. For example: supplier´s factory, port of Shanghai, airport of Beijing, etc.

详细写明交付地点。例如：供应商的工厂、上海港、北京机场等

SCHEDULE 5

附表 5FORMULA TO DETERMINE PRICE CHANGES (CLAUSE 6)


决定价格变更的公式（条款 6）Insert the formula to determine price changes depending for instance on changes in raw materials prices, exchange rates, inflation, etc.

决定价格变更的公式，例如原材料价格变化、汇率变化、通胀情况变化等


Although it is true that China has experienced great economic growth in recent years, it is important to bear in mind that until a few years ago China did not have private companies, or hardly any international lawyers firms. Consequently, the legal system and legal procedures and documents are considerably less developed than in the Western world. However, for companies trading in China, it is essential to use draft contracts to help in negotiations with Chinese companies and which can also provide legal certainty.

In this guide, we are going to analyse, first, why foreign companies doing business in China - be it export, import or manufacturing - should have their own clear and simple draft contracts, adapted to commercial practices in China and to its laws; and then, we shall offer guidelines on drawing up and negotiating the main clauses in contracts with Chinese companies such as: Exclusivity, Intellectual Property Rights, Confidentiality, Compensation, Place of Delivery and Form of Payment, Applicable Law, Arbitration, etc.

THE CONTRACT AS A NEGOTIATION INSTRUMENT IN CHINA

There is a belief that in China the agreements set out in contracts are often not complied with, and that the system does not provide sufficient legal guarantees; in this regard, it is widely thought that signing a contract is merely the start of the real negotiations. Therefore, it is essential for foreign companies to have contracts whose essential role is to reduce the risk of conflicts as much as it is possible: Chinese business culture is based on harmony between the Parties.

A contract which is efficient for regulating the relations between a foreign company and its Chinese partner will basically need to have three characteristics: clarity, compliance with obligations and threat of litigation.

Clarity

One of the negotiation strategies used by the Chinese is to answer "yes" to everything, even if they have not really understood the question, or do not agree -and they sometimes blame their interpreters for possible misunderstandings-. To avoid these situations which will compromise compliance with the agreements, contracts must be simple and clear. It is also advisable to have a version in two languages, English and Chinese, which will help the


N E G O T I A T I N G C O N T R A C T S I N C H I N A

Chinese Party to understand the contract. A clear and simple contract will allow the foreign company to know what it may realistically expect from the Chinese company.

Preference in compliance with obligations

China has become the world's economic centre and its companies have a lot of proposals to do business with foreign companies. This privileged situation allows them to negotiate and reach similar agreements with several foreign companies at the same time. A contract clearly specifying the Parties' obligations and establishing a system of sanctions in the event of a breach of contract will be a competitive advantage for the foreign company. In other words, the Chinese company will honour its undertakings as a matter of priority with foreign companies with which it has signed contracts which are clearly expressed, compared to those with which it has not drawn up contracts, or with which it does have contracts but when these do not clearly specify the Parties' obligations.

Threat of litigation

The Chinese political system is quite authoritarian, and in this regard Chinese companies respect the law. On the other hand, it is important to take into account that in the annual Doing Business report carried out by the World Bank, China usually stands around the 20th position in the ranking (16 in 2012) of the 183 countries analysed, in the section of "Enforcing Contracts". Therefore, the threat of the foreign company of starting legal proceedings or using arbitration (depending on what has been stipulated in the contract) in the event of non-compliance by the Chinese Party will reinforce the negotiating position of the foreign company.

GUIDELINES FOR DRAWING UP THE MAIN CONTRACT CLAUSES IN CHINA

Having emphasised the usefulness for foreign companies of having clear and precise contracts to regulate their commercial relations with Chinese companies, we shall now analyse as follows the most important clauses and how they should be negotiated in accordance with Chinese commercial practices and laws. Exclusivity

Chinese companies, on the strength of their great negotiating power, often demand that the foreign company should grant them exclusivity in all - or part - of Chinese territory, for example in distribution or agency contracts. Foreign companies are advised, however, not to grant this exclusivity, because in addition to not being able to use other distribution channels, in the event of inefficient management by their Chinese partner, their access to the market would be suspended until the contract is terminated.


In any event, the thing to do is to make the exclusivity dependent on reaching a minimum sales target. If the Chinese partner were unable to meet such a target, the foreign company will be able to cancel the contract, or, alternatively, to continue but on a basis of non-exclusivity so that it might be able to distribute its products in the same territory through other companies.

Intellectual Property Rights

This is an essential point in any contract with a Chinese company in light of the well-known difficulties faced by foreign companies in protecting intellectual property in China. A clause must be included whereby the Chinese partner acknowledges that these rights (patents, trademarks, designs, utility models) are the property of the foreign company, and also undertakes not to apply to register these rights in China or also in other countries. In any event, as well as including this clause in all contracts carried out in China, foreign companies are advised to seek legal advice regarding this matter and to consider the possibility of registering their Intellectual Property Rights in China.

Confidentiality

It is important to include a clause in all contracts stating that the Chinese company shall not be entitled to disclose to third parties technical or commercial information of the foreign company or to use the aforesaid information for proposals other than those set out in the contract, during the validity of the contract or once it is terminated. In negotiating complex contracts (OEM Manufacturing, License, Joint Venture) which may include the supply of technical and commercial information, even before the signing of the contract, it is essential to sign a Confidentiality Agreement with the Chinese company, clearly specifying what confidential information is considered to be, in other words what is called "List of Confidential Information".

Quality control

In China, the concept of quality differs from that which exists in the Western world. Therefore, companies which sign supply and manufacturing contracts in China must include a clause which exhaustively covers possible incidents or breaches which could arise in the quality of the products supplied. This clause must include matter such as the following, inter alia: permission to visit the Chinese manufacturer's installations, sending of samples representing the products which are to be manufactured, inspections during the production process, etc.

Required authorisations

Chinese laws regarding external trade and foreign investments are complex, and sometimes difficult to comply with by foreign companies, so that it is advisable that contracts include a Required Authorisations clause so that the Chinese Party shall be held


responsible for requesting, processing and, lastly, obtaining all the necessary documents, such as licenses, certificates, import permits, etc.

Delivery and payment period specifications

In contracts with Chinese companies, it is important to clearly specify the place the goods are to be delivered. It will usually be a seaport which will have to be mentioned in the contract - if it is going to be the usual port - or in the shipment orders, as can happen in the supply and OEM manufacturing contracts.

As far as payment is concerned, the common practice is for the payment period (usually 30 days) to begin on the date the goods are inspected and approved in the port of origin, rather than on the shipping date or acceptance date of the goods at the destination.

Subcontracting

The more competitive Chinese companies often have a large number of proposals by foreign companies for distributing or manufacturing products in China. In these circumstances, it tends to subcontract part of its activities to other companies over which it does not have sufficient control. Therefore, contracts with Chinese companies should include a clause whereby the Chinese company is not allowed to subcontract its obligations to third parties. By this means, when the Chinese company does not have sufficient capacity, it shall subcontract the works of those foreign companies which do not have this clause in their contracts.

Compensation

Chinese law is less protectionist than in countries of the European Union or the United States when dealing with the right of compensation in the event of termination of contract. Thus, in the Compensation Clause the foreign company is recommended to choose the option of compensation in accordance with Chinese laws. Law and jurisdiction

In accordance with Chinese laws (PRC Civil Law), the Parties are allowed to choose the law and jurisdiction they wish to apply in contracts with foreign companies. This has been ratified in a Provision of the Popular Republic of China's Supreme Court (Provisions of the Supreme People´s Court on Certain Issues Concerning the Application of Law for the Hearing of Foreign-Related Civil or Commercial Contractual Disputes - 8 August 2007).

Nevertheless, in commercial practices Chinese companies refuse to sign contracts in which matters of litigation are not referred to the Courts or Arbitration Commissions of China. The questions of which procedure to choose will depend particularly on the power and influence of the Chinese Party and the prestige of the Court proposed by the Chinese


company; as a general rule, it will be preferable to choose the alternative of Arbitration rather than the Court.

Arbitration

In contracts subject to Arbitration in China, it is advisable to act as follows:

Choose one of the Arbitration Commissions with most prestige and international experience: CIETAC (China International and Economic Trade Arbitration Commission) or BAC (Beijing Arbitration Commission). Chinese companies will not oppose at this point.

Regardless of where the central office of the Chinese company is located, it is preferable for the Arbitration to take place in Beijing or Shanghai, the two cities with most experience and the best arbitrators. The Chinese company could possibly propose another city, but they will usually accept one of these two cities.

At least one of the arbitrators must have a nationality which is not Chinese. Chinese companies will usually not oppose at this point.

The arbitration will be carried out in the English language. It is important to take into account that if no language is specified in the contract, the arbitration will be in Chinese. At this point, Chinese companies would be expected to object strongly, and might even use it as grounds for not signing the contract.

Language

In China, contracts are usually drawn up either in English or in a dual English-Chinese version. It is not common to sign contracts in other languages such as Spanish, French or German. For the version in Chinese, simplified Mandarin Chinese shall be used.

It is advisable to use the dual English-Chinese version as this will make it easier to negotiate the contract, and also help compliance with obligations and an amicable settlement in the event of conflict.

However, when using the English-Chinese dual version, the Chinese company would try to insist that the Chinese version prevails in the event of conflict.

Signatures

For the Chinese, signing a contract with a foreign company is an important act which is given a certain degree of protocol and which is usually celebrated with a banquet. When contracts are especially relevant, a local authority or national representative of the foreign company (Ambassador, Consul, Commercial Attaché, etc.) is often invited.


The persons who sign the contracts on behalf of each one of the Parties will have to have the same hierarchical range. Furthermore, it is common procedure for a witness to sign on behalf of each Party. Next to the signatures, the seal of each one of the companies should be stamped - this is because in accordance with Chinese law, contracts without a seal might be invalid.

Lastly, it is important to take into account that China is a huge country: each province has its own laws, rules and uses, which from the standpoint of business are just as important as national laws. In this regard, you are advised to seek assistance from professionals with local knowledge of the businesses, especially in operations with a certain degree of importance, which could give rise to conflicts with serious consequences for foreign companies.



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