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China legal services · Manufacturing agreements
A manufacturing agreement is the contract that turns your order into obligations a Chinese factory can be held to: what it makes, to which standard, how you check the goods, when risk and payment pass, who owns the tooling, and where a dispute is decided. I draft and review these agreements for overseas buyers, in English and Chinese, with the Chinese text written to be read by a Chinese court.
Scope and fee are confirmed in writing before paid work begins.
Open the part that matches your question. Each section is complete on its own.
I've acted in Chinese courts for buyers claiming against factories, and for factories defending those claims. Seeing the factory's side of the file is useful, because the buyer's case usually fails for reasons that were settled when the contract was signed, long before anything went wrong.
The four I see most often:
The buyer can't prove the goods in question are the goods the factory delivered. Batches get mixed in a warehouse, goods are repacked for export, other suppliers' parts end up in the same system. If nothing in the contract ties a lot number, a sealed sample or a serial number to the delivery, the factory only has to say "those might not be ours."
The inspection that found the problem isn't the one the contract calls for. An overseas customer's lab tests the goods against its own country's standard, or against a standard the contract never mentions. A Chinese court asks whether the goods meet the contract, so a report measuring something else carries little weight.
The buyer kept going. It went on accepting deliveries, promising payment or using the equipment after it knew about the problem, and only raised quality when the factory chased the balance. Courts read that conduct as evidence.
The loss abroad was never proved. A customer's claim email or a deduction from an invoice shows that someone complained. It doesn't show that money was actually paid, or that the amount was reasonable.
Each of these has a drafting answer, and most of this page is about them.
These are the provisions Chinese suppliers most often resist in my negotiations. For each, here's what the factory usually wants and what I write instead.
What the factory wants: freedom to use surplus stock, rejects and packaging as it sees fit.
What I write: production only against written orders with quantities; any surplus reported, then delivered to you or destroyed on your instruction with photos; branded packaging, labels and printing plates returned or destroyed when the relationship ends; a fixed sum for each unauthorised run plus an amount per unit found.
→ What three Chinese courts awarded when factories kept producing
What the factory wants: tooling described as "developed by the factory," or cost built into the unit price with no ownership term.
What I write: tooling you pay for belongs to you from payment, whether paid separately or amortised, with a tooling schedule (photos, tool numbers, cavity counts) signed by both sides, and ownership stated separately from the product design. Who owns the drawings and who owns the steel are different questions.
What the factory wants: to keep the tooling until every account is settled.
What I write: return within a fixed number of days of your written request, ready for shipment, whatever else is in dispute; no right to hold the tooling for money owed, stated expressly; and a daily sum if it's late. Whether a factory can lawfully hold tooling depends on who owns it and what the debt is for, and a written exclusion takes most of that argument away (Civil Code arts. 447–449, 783).
Chinese law has separate rules for a sale of goods and for a processing contract, where the factory makes something to your requirements and delivers the result (Civil Code art. 770). OEM work often sits close to the line, and the title on the document doesn't settle it. A court looks at what the factory actually undertook to do.
The classification changes things you care about:
I don't try to force a label onto the deal. I write the clauses that matter so they work whichever way a court classifies it.
Where the contract doesn't make the quality requirement clear, and it can't be filled in from the rest of the contract or trade practice, Chinese law applies a fallback: mandatory national standards, then recommended national standards, then industry standards, then the usual standard or one that fits the purpose of the contract (Civil Code arts. 510–511). That fallback is rarely what an overseas buyer has in mind. If your market has its own requirements, or you're relying on an approved sample, the contract has to say so, and say which prevails when they conflict.
If the contract sets an inspection period, you must notify the factory of quantity or quality problems within it, or the goods are treated as conforming (art. 621). If it sets none, you must notify within a reasonable time after you found the problem or should have, and in any case within two years of receiving the goods, unless a quality guarantee period applies instead.
Two rules help buyers. A period that's too short to inspect the goods properly, given what they are, counts only as the period for visible defects (art. 622). And if the factory knew or should have known the goods didn't conform, the notice deadlines don't bind you (art. 621). Neither rule is something to rely on. A contract that sets separate periods for visible defects and for defects that only show in use or testing avoids the argument.
— from USD 3,950
One Chinese supplier, one product family, one bilingual agreement with the Chinese text controlling, one consolidated revision round and a 30-minute handover call.
— from USD 1,250
A written risk review of the factory's draft or your current contract, with the changes I'd ask for. Replacement drafting is separate.
— from USD 1,750
Inspection, acceptance, change control and defect handling, as a bilingual schedule to the main agreement.
— quoted by round
Counterparty redlines, calls and further drafting rounds.
Fees and deliverables are confirmed in writing before paid work begins. If you're not sure which scope fits, send a short summary and I'll suggest the smallest one that does the job.
You describe the product, the supplier and the timetable without sending confidential files in the first message.
These examples are based on matters I have handled. Names, products, places, dates, amounts and other identifying details have been removed or changed. They show the kind of work involved, not a promised result.
Acting for a buyer
A buyer of a specialist industrial material claimed that two deliveries, including a replacement batch, failed in production. The parties had agreed in their negotiations that retained samples, batch records and independent laboratory testing would settle any disagreement. That agreement, together with the supplier's own conduct in remaking and recalling the goods, allowed the court to connect the tested material to the delivery.
Acting for a buyer
A buyer of custom-made parts for export discovered faults only after its overseas customer began assembly. The delivery note's short inspection period barred claims for defects that could have been seen on arrival. It didn't bar a hidden finishing defect that only appeared later. Part of the export return and repair costs was recovered; the rest failed for lack of evidence that it had actually been spent.
Acting for a supplier
An exporter claimed that industrial components were defective, relying on inspection reports from its overseas customer. The contract specified a Chinese technical standard; the reports applied a different one. Prompt complaint was not proof of non-conformity, and the claim failed.
Advising a buyer
An overseas brand had funded the tooling for a product the factory had originally designed, and had been promised exclusive rights for North America. The factory later sold a slightly modified version to others. The work separated three questions: ownership of the design, ownership of the tooling the client paid for, and the exclusivity promise. It then set out a low-conflict route that confirmed the tooling's location and status in writing while keeping supply running.
Usually not for a first production run. A purchase order fixes the product, price and quantity, but it rarely deals with inspection, tooling, what happens to surplus, or where disputes go, and those are the points that decide most disputes.
Yes. Send an outline first with your signing deadline. The review identifies what to change and what to ask the factory for, and replacement drafting is a separate step if you need it.
Both, with the Chinese version controlling, in most cases. It's the version a Chinese court or arbitration body will read, and the factory's signatory can read it before sealing it.
You can own it either way, but the contract has to say so and say from when. Where tooling is amortised, I tie ownership to a schedule and to payments, so there's no argument later about whether it's been "paid off."
Accept that it's final for what can be checked at the factory. Keep a separate right to inspect on arrival, with its own period for defects that only show in use.
If your product has detailed specifications, inspection levels or frequent changes, yes. Keeping them in a schedule lets you update them without renegotiating the whole contract.
English or Chinese. A short, non-confidential summary is enough to start.