What Are 30/70 Payment Terms? When Is the 70% Balance Due?

What does 30/70 mean?

The 30% is usually paid when the order is confirmed, before production starts. The 70% is the balance. Common triggers for the balance:

• On completion. The supplier says production is finished, often with photos.
• Before shipment. You pay before the goods leave, often without an inspection result.
• After a passed inspection. You pay once an agreed inspection finds the goods conform.
• Against documents. You pay on a copy of the bill of lading or other shipping documents.
• On arrival. You pay after you receive and check the goods.

Each trigger puts the risk in a different place. "70% before shipment" gives you no right to inspect after arrival before paying. Calling the 30% a "deposit" doesn't make it a Chinese-law deposit (dingjin); I explain the difference in Deposit or Prepayment? Getting a Refund From a Chinese Supplier That Never Delivered.

When is the 70% due if the contract only says 30/70?

First look at the rest of the contract, any later agreement and how you have dealt before (art. 510). If that settles nothing, the balance is due when you receive the goods or the documents to take delivery of them (art. 628). A supplier that wants paying once production ends and a buyer that wants an inspection first can each read "30/70" its own way, and nothing in the contract settles it.

How should you write the 70% payment trigger?

Name the event, the document that proves it, and what happens if it fails. Both sides should be able to tell from a document whether the balance is due. Cover these points:

• Who inspects. A named inspection company or your own QC, who books it, and how much notice the supplier gives that goods are ready.
• Which standard. The specification annex and the approved sample, by version or date.
• What proves a pass. The inspection report, and when you receive it.
• After a failure. The list of defects, the time to fix them, a re-inspection against the same list, and who pays for it.
• A partial failure. Whether the balance for the goods that pass is paid on time.
• Your own delay. What happens if you don't book the inspection within the agreed time.
• Payment and shipment. How many days after a pass you pay, and how many days after payment the goods ship.

The clause can read like this:

Balance. The Buyer pays 70% of the price within [5] business days after receiving a report from [inspection company] showing that the goods conform to Annex [1] and the approved sample dated [ ]. The Supplier gives at least [7] days' written notice that the goods are ready. If the Buyer does not arrange the inspection within [10] days after that notice, the balance falls due on the [ ]th day after the notice.

Failed inspection. If the report lists defects, the Supplier fixes them within [ ] days and the goods are re-inspected against the same list and standard. The Supplier pays for any re-inspection after a failure. If only some goods fail, the Buyer pays the balance for the goods that pass, and the rest after the re-inspection is passed.

Shipment. The Supplier ships within [ ] days after receiving the balance.

I draft purchase contracts that tie each payment to a step you can check →