China sourcing glossary
What Is a Sales Confirmation or Sales Contract? What to Check Before You Sign One
What is the difference between a sales confirmation and a sales contract?
Mostly who drafts it and how much it covers. A sales confirmation (SC) usually comes from the seller after your order or its quotation. It lists the goods, quantity, price, delivery and payment, and many have printed terms on the back. A sales contract is usually longer and laid out for both parties to sign.
In law, the two can do the same job. A clear SC that both sides accept is a contract, or part of one. A sales contract meant to be signed by both sides is formed when both sign or stamp it, or when one side performs its main obligation and the other accepts that (art. 490).
If you sent a PO and the supplier answered with an SC, compare the two before you treat the order as agreed. An SC that changes key terms is a new offer (art. 488).
Which details must match across the documents?
Start with the seller's name. The registered Chinese name should be the same on the contract, on every annex, on the signing page and on the bank details. Salespeople often use a short English trade name, and a trade name is not a company. Ask how it relates to the registered name, then write the full registered name into the documents. How to find a Chinese supplier's registered company name shows where to look. If the payee is a different company, read what to do when the payee is not the supplier.
Then the annexes and drawings. Two documents with the same title can carry different terms, so open each one and check its number and version.
After the name is fixed, read the liability terms again. Correcting the seller's name changes nothing about what the seller has promised.
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. They don't promise any result.
Acting for a buyer
The supplier's name differed across the quotation, contract and payment details
In a check before signing, the company names on the quotation, the contract and the payment details did not line up, and the salesperson had always used a short English trade name. The client had only the English confirmation and thought the names were close enough. I put the business licence, the full quotation, the contract signing page and the payment details side by side, to confirm which company was actually promising to supply. I asked the supplier to explain how its trade name related to its registered name, wrote the registered name back into the documents, and checked the annex numbers and referenced drawings, so that no signing page or annex still carried another company's details. When the revised draft came back, I compared it with the previous version to make sure no new payment terms had slipped in with the name fix, and the client signed.
What should you check in a supplier's sales confirmation before signing?
- Front and back. Read the printed terms on the back as closely as the front.
- Annex list. Every annex referred to is attached, numbered as the contract numbers it, and dated.
- Drawing and specification versions. The SC should cite the latest drawing or approved sample by version or date. If it cites an older drawing, don't assume your later sample approval replaced it. Get the reference changed.
- Signing page. The seller's registered name, its company chop, the signatory's name, and a page that belongs to this version of the document.
- Terms on the supplier's website. If the SC says the supplier's general terms apply, save a dated copy of the version you saw when you signed.
- Claim periods. A line such as "claims within 7 days of arrival" matters. If you miss an agreed inspection period, the goods are treated as conforming (art. 621). A period too short for a full inspection counts only for visible defects (art. 622), but you would have to prove that. Agree a period that fits the goods.
- Liability limits. Standard printed terms that cut the seller's liability must be drawn to your attention. If they weren't, you can argue they never became part of the contract (art. 496). Don't plan on that argument. Mark up those terms before you sign.
Questions from overseas buyers
Is a sales confirmation legally binding?
It can be. If it sets out the goods, quantity and price and you sign it, it binds both sides. Even unsigned, it can become a contract if you pay against it and the supplier accepts the payment (arts. 480 and 490).
Should I sign the supplier's sales contract or send my own?
Either works if the terms are right. A supplier's template usually favours the supplier on returns, quality claims, liability caps and the choice of court. If you sign it, mark up those terms first. For standard products, your own purchase contract puts inspection, warranty and disputes on your terms.
I draft purchase contracts and check a supplier's version before you sign →
Sources and translations
- Civil Code of the PRC (2020), arts. 480, 488, 490, 496, 621 and 622.
Translations are mine and unofficial.
Official texts cited in this article.
- Civil Code of the PRC (2020) npc.gov.cn
Have a China-side question?
Give us the supplier's name as it appears on the quotation or invoice. List the documents you have, such as the contract or order and the supplier's last message. The responsible lawyer replies within one calendar day. We will tell you where you stand and what your options are.