This guide covers formation, key templates, performance, and dispute readiness for cross-border commercial deals.
1. Formation and validity
Offer, acceptance, and bargained exchange are recognized in Civil Code structure. Written form is mandatory or strongly advisable for major commercial deals. Validity issues include fraud, coercion, malicious collusion harming third parties, and violations of mandatory law or public order.
Authority problems are common: who can bind the Chinese company? Check legal representative status, articles of association, and whether the counterparty's chop is the official company seal. "Contract seal" vs "finance seal" misuse appears in many disputes.
| Template | Must nail | Frequent gap |
|---|---|---|
| Sales / supply | Specs, inspection, quality metrics, Incoterms | Vague acceptance criteria |
| Distribution / agency | Territory, exclusivity, online channels, exit | Unclear IP and MAP control |
| OEM / ODM | Tooling, molds, IP, audit, subcontract bans | No mold ownership clause |
| Services / SaaS | Data, SLAs, liability caps, deliverable IP | Ignoring localization duties |
2. Key commercial templates
- Sales and supply - specifications, inspection, quality metrics, Incoterms alignment, retention of title.
- Distribution / agency - territory, exclusivity, IP use, online sales channels, termination and sell-off.
- OEM/ODM manufacturing - tooling ownership, molds, IP, audit, subcontracting bans.
- Services and SaaS - data localization, SLAs, liability caps, IP ownership of deliverables.
- NDA / term sheets - bilingual consistency and chop formalities even for "preliminary" docs.
3. Payment, guarantees, and performance
Deposits, advance payments, bank guarantees, and personal guarantees from founders each carry different enforcement profiles. Late performance remedies include agreed damages (liquidated damages subject to adjustment), specific performance in some cases, and termination rights carefully drafted around cure periods.
4. E-commerce and platform sales
Online channel control, MAP policies, live-streaming promotions, and consumer protection rules affect brand owners. Platform rules can change practical enforcement more quickly than statutes. Align consumer refund practices with PRC consumer law expectations. Product defects and recalls connect to the product liability guide.
5. M&A and investment contracts
Share purchase agreements, joint venture contracts, and capital increase documents interact with foreign investment negative lists, merger filing thresholds, and sector licenses. Closing conditions should track real regulatory paths - see the company formation guide.
6. Dispute clauses and evidence
Choose court vs arbitration deliberately; name institution, seat, language, and rules. Preserve WeChat negotiations, stamped delivery notes, quality reports, and payment trails. Detail is in the dispute resolution guide.
If both English and Chinese versions exist, state which controls - and have a bilingual lawyer read for meaning conflicts before signature, not after breach.
7. Practical checklist
- Verify counterparty chops and legal representative authority.
- Define specs, acceptance, and quality remedies in measurable terms.
- Allocate IP and tooling ownership for any China manufacturing.
- Set payment security proportional to performance risk.
- Draft a usable dispute clause - not a copy-paste orphan.
- Archive the executed Chinese version and seal specimens.
