buying product from China, much will depend on both sides understanding
the intended terms of the deal, and the extent to which you will
be able to reduce the deal to writing and achieve some level of
Flows of liabilities,
and in fact the business deal itself, are controlled by the contract
between the parties. Care should be taken in understanding contract
law of the countries where one will be conducting business. In China
contract law is unreliable and one may want to make contracts in
China subject to Hong Kong law, with Hong Kong as the venue for
dispute resolution. Also, arbitration may be a more reliable solution
for disputes, rather than litigation.
being shipped to China (e.g. raw materials) and from China (e.g.
finished product) needs to be insured in transit, and control over
the insurance should be maintained in all cases if at all possible.
If the transit insurance will be handled by the foreign party, the
sale should be on terms whereby risk of non-insurance or poor insurance
falls to the party arranging the coverage, not to the innocent party.
It is often not possible to know the financial strength and reliability
of certain Chinese insurers.
We will help
you understand the risks inherent in business deals in China, and
ways in which such risks can be managed to the fullest extent possible.
cannot enter into alliances
until we are acquainted with the designs of our neighbors.”
Tzu, ancient Chinese warrior and philosopher