No Written Contract, No Problem? Recovering Overdue Payment for Goods in China

When a supplier in China sells goods without a signed paper contract, relying instead on WeChat messages, delivery receipts, and invoices, a buyer's default can look hopeless. The absence of a written agreement does not, however, extinguish the supplier's right to payment. Chinese courts routinely enforce sale transactions formed through electronic communications, provided the supplier can assemble a coherent evidentiary record. This article explains how an unwritten contract becomes enforceable, what evidence wins in court, and how suppliers can recover both the principal debt and overdue-payment interest.

In a matter concluded before a district court in Nanjing in 2026, a supplier of packaging materials had filled orders placed by the buyer's staff through WeChat, delivered goods in multiple batches, and issued VAT invoices, all without a single paper purchase contract. When the buyer stopped paying, the account manager who had placed the orders had already resigned and the company became uncontactable. The court nonetheless recognised a valid sale relationship, ordered payment of the outstanding principal of RMB 32,855.86, and awarded overdue-payment interest at 1.5 times the one-year Loan Prime Rate (LPR) running from the final reconciliation date.

Key Words:Contract Drafting and Review, Business and Contract, Supply Chain Contracts

Contract Formation Without a Written Document#

The Civil Code of the People's Republic of China (2021) does not require a contract to take any particular form. Article 469 provides that the parties may conclude a contract in writing, orally, or in any other form, and Article 490 supplies the key rule for transactions concluded informally:

Where the parties do not conclude a contract in writing, but one party has already performed its main obligation and the other party has accepted it, the contract is formed.

Civil Code of the People's Republic of China (2021), Article 490, paragraph 2

Applied to a supply arrangement, the main obligation is delivery of the goods, and the acceptance is the buyer taking delivery and, in many cases, paying part of the price. Once both elements exist, a fact-based sale contract exists even though no document was signed. Courts across China reach this conclusion routinely, and the same analysis applies to orders placed by WeChat, e-mail, or telephone.

Building an Evidence Chain From Electronic Records#

Winning a claim on an unwritten contract depends on corroboration. In practice, the decisive record set combines four types of evidence:

• Chat records. Original WeChat conversations showing order placement, price, quantity, and reconciliation. Preserve the phone and the account; screenshots alone are weaker than the underlying data if authenticity is challenged.
• Delivery and logistics receipts. Signed waybills, express delivery records, and warehouse acceptance notes for each batch.
• VAT invoices. Issued invoices evidence the seller's performance and, together with payment records, allow the court to map the outstanding balance.
• Bank transfer records. Partial payments show the buyer acknowledged the debt and establish the baseline for the unpaid amount.

Where the buyer's employee placed orders and reconciled accounts, those acts constitute performance of the employee's duties, and the employer bears responsibility for them under the Civil Code's rules on agency. The employee's later resignation does not release the company from payment obligations. This is why, in the Nanjing matter, the court accepted orders placed by a manager who had already left the company.

Overdue Payment Interest: The LPR Standard#

Where the parties did not agree on liquidated damages for late payment, the seller may still claim compensation for the loss caused by the delay. The governing rule is Article 18 of the Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Cases of Disputes over Sales Contracts (2020 revision): the people's court may calculate the loss on the basis of the Loan Prime Rate published by the National Interbank Funding Center, referencing the standard applicable to overdue fines. In practice, Chinese courts apply an uplift of 30% to 50% over the one-year LPR, that is, 1.3 to 1.5 times the LPR.

The interest period runs from the date on which payment fell due. Where the parties have a written reconciliation or a formal demand letter, that date is usually the starting point. In the Nanjing case, interest ran from the final reconciliation in March 2023. This statutory interest exists independently of any contractual penalty clause, so a supplier with no agreed penalty can still recover a meaningful amount for the delay.

When the Buyer Disappears: Default Judgment and Service by Publication#

Defaulting buyers often become unreachable, and suppliers sometimes assume this makes litigation pointless. The Civil Procedure Law of the People's Republic of China (2023) allows service by publication where the defendant cannot be located: under Article 95, if a party's whereabouts are unknown or service cannot be effected by other means, the court publishes the notice, and after thirty days service is deemed complete. A defendant who then fails to appear without justification may be subject to a default judgment under the Law.

Absence does not mean automatic success. The plaintiff's evidence must still prove the debt. This is the practical reason a complete, well-organised evidence file matters: when the defendant is absent, the court reviews the documentary record on its own, and gaps in the chain can be fatal. In the Nanjing matter, the supplier's counsel compiled the records into a structured submission, separating invoiced and uninvoiced supply, which allowed the court to compute the exact outstanding figure and to order the buyer to bear the court acceptance fee and publication costs.

Authenticating Electronic Records: The SPC Evidence Rules#

Because a claim built on WeChat messages turns on the authenticity of electronic records, the evidential framework of the Supreme People's Court matters. The Provisions of the Supreme People's Court on Evidence in Civil Procedures (2019 revision) expressly list instant-messaging conversations and electronic transaction records as electronic data, and Article 93 directs the court to assess authenticity by reference to the reliability of the system on which the data was generated and stored, the clarity and completeness of the content, and whether the data was formed in the normal course of dealings. Article 94 then identifies circumstances in which authenticity may be presumed, including records kept by a neutral third-party platform and data unfavourable to the party that produced it.

In practice, this means the supplier should preserve the original phone and WeChat account rather than relying on screenshots alone, and should keep the chat history in a form that can be cross-checked against delivery records, invoices, and bank statements. A coherent chain of electronic records, corroborated by documents issued at the time of each transaction, is exactly the kind of evidence Chinese courts accept when no paper contract exists.

Practical Guidance for Foreign Suppliers#

For foreign companies selling into China, the lessons are straightforward, and they apply with equal force to cross-border supply arrangements, where the buyer is a Chinese subsidiary or distributor rather than a domestic enterprise:

• Put it in writing where possible. A short purchase order, framework agreement, or an annual signed reconciliation converts an informal relationship into documented terms.
• Define payment terms explicitly. Due dates, currency, interest, and governing law in the contract prevent disputes over when payment becomes late.
• Keep batch-level records. Every delivery should be documented with a signed receipt; multi-destination deliveries need per-batch proof to defeat a we never received it defence.
• Control employee authority. Confirm in writing which staff may place orders and reconcile, and monitor turnover in the buyer's procurement team.
• Act before the limitation period expires. The general civil limitation period in China is three years under Article 188 of the Civil Code; a demand letter, reconciliation, or partial payment restarts the clock.
• Claim even against an absent buyer. Service by publication and default judgment are available, and a judgment supports later enforcement against the buyer's assets.

An unwritten contract is not an unenforceable contract in China. WeChat orders, delivery receipts, invoices, and bank records can together prove a valid sale relationship, and Chinese courts will order payment of both the principal and LPR-based interest, even when the buyer is missing and cannot be served in person. The supplier that keeps orderly records, and acts within the three-year limitation period, stands in a strong position. Mingyu Yang of Beijing Xianzhi Law Firm in Chaoyang, Beijing advises domestic and foreign clients on contract drafting, commercial transactions, and the recovery of overdue payment. If you are owed money for goods supplied into China, early case assessment and evidence preservation make the difference between a recoverable claim and a write-off.