The contract template with the factory in China: what to include in 2025

Cooperation with Chinese factories has long ceased to be a rarity – from small businesses to large companies all work with China.
However, a successful deal in China does not start with the supply, but with the contract.

In 2025, the requirements for contracts with Chinese partners tightened: export controls increased, currency rules changed, and factories became more attentive to legal details.
Therefore, the templates of contracts, which operated “out of habit”, no longer provide either protection of interests or compliance with Chinese law.

Let's see what. must be included in the contract with the factory in China in 2025To avoid risks, delays and litigation.

General structure of the treaty

The standard contract with the Chinese manufacturer includes the following sections:

1. Preamble and identification of the parties;
2. Subject matter of the contract;
3. Technical requirements and specification of the goods;
4. Terms of payment;
5. Delivery time and schedule;
6. Quality and inspection;
7. Packaging, labeling and logistics;
8. Guarantees and liability of the parties;
9. Dispute resolution and applicable law;
10. Force majeure;
11. Signatures and seals.

But in 2025, this standard structure was added. new mandatory paragraphswithout which the contract may be invalidated or incomplete upon inspection by the Chinese authorities.

Identification of parties: exact details and licenses

Chinese factories operate under different names: the official legal name in Chinese often does not coincide with the English-language brand.
Therefore, in 2025 it is necessary to:

• point out chinese (In Chinese, with business license registration number)
• copy Business License:) stamped;
• point out production site (not just the office);
• for a foreign counterparty - name, address, TIN or registration number in their country.

This will help with the authentication of the company and subsequent disputes.

Subject matter of the contract: precise wording and reference to the specification

You can not limit yourself to the phrase “delivery of goods according to order”.
In 2025, the Chinese courts demanded detail - indicating:

• models, articles, technical parameters;
• quality standard (GB, ISO, EN, etc.);
• reference to the attached specification (Specification Sheet);
• volume and units of measurement (piece, kg, sets).

It is recommended to make the specification a separate appendix with signatures and seals of both parties.

Quality and Control: Mandatory Verification Stages

After multiple cases of defective shipments, China’s factories are demanding formalization of control procedures in 2025.
It is recommended that:

• Pre-Production Inspection (PPI) - check before launching the batch;
• During Production Inspection (DPI) Inspection during production (20-50% readiness);
• Pre-Shipment Inspection (PSI) final inspection before shipment;
• Indication of who pays for the inspection (usually the buyer or equally);
• Possibility of delaying payment until quality is confirmed.

It's also important to prescribe. marriage and how the refund or compensation is made.

Terms of payment

Classical diagram. 30/7030% prepayment, 70% after final inspection or before shipment.
However, in 2025, many factories will move to Letter of Credit (Letter of Credit) or escrow accountsTo minimize the risks of both parties.

Be sure to state:

• currency of payment (USD, CNY or EUR);
• the recipient bank (in China or Hong Kong);
• the time of payment of each consignment;
• conditions of refund of prepayment in case of refusal or defect.

Time of production and delivery

It must be clearly defined:

• start and end of production;
• date of inspection and dispatch;
• liability for delay (usually a fine of 0.1-0.3% of the contract amount for each day of delay);
• cases where the factory may extend the term (for example, in case of interruptions in the supply of raw materials or force majeure).

From 2025, Chinese suppliers will be required to add a clause on timing flexibility Changes in export regulations or logistics restrictions.

Packaging, labelling and logistics

Even labeling errors can cause delays at Chinese or Russian customs.
The contract should therefore include:

• Packaging requirements (material, protection, barcodes, pallets);
• Marking in English and Chinese;
• Conditions of transportation (Incoterms 2020 – FOB, CIF, DAP, etc.);
• liability of the parties for delivery and insurance of cargo.

Guarantees, complaints and liability

In 2025, factories began to pay more attention to guarantees.
It is recommended to prescribe:

• warranty period (from 6 to 24 months);
• the procedure for complaint (within 10-15 days after receipt of the goods);
• Replacement, repair or refund obligations;
• the amount of fines in case of breach of obligations.

Important: Chinese law allows for enforcement only the fines stipulated in the contract.
If you do not specify the amount, it will be impossible to recover it.

Intellectual property and confidentiality

One of the key points in 2025.
Many foreign companies lose their design or trademark due to a lack of clear protection in the contract.

Add:

• prohibition of copying and selling products to third parties;
• condition of non-disclosure of technology, design and drawings;
• liability for violation (fixed amount fine or percentage of contract).

It may also be pointed out that All rights to the product belong to the customer from the moment of payment or approval of the design.

Dispute resolution and applicable law

The most important point to protect interests abroad.
It is recommended to choose one of the options:

• arbitration (e.g. CIETAC, Shanghai, Shenzhen);
• Hong Kong arbitration (HKIAC)
• arbitration SIAC is a neutral jurisdiction.

If you’re working with a Chinese factory, Chinese courts will prefer contracts drawn up by the government. Chinese and signed with the Chinese seal).

Optimal to have bilingual contract (English + Chinese)which version is the priority in case of disagreement.

New requirements for 2025

In 2025, new legal and economic realities emerged that should be taken into account:

1. ESG and ecostandards Chinese factories must comply with environmental regulations and may require partners to declare sustainable production.
2. Digital signatures and electronic contracts e-certificates and e-documents have been legalized in China (through Fapiao, AliContract, etc.).
3. Exchange control Transfers in yuan are subject to verification by SAFE (State Administration of Foreign Exchange Control of China).
4. Localization of responsibility Factories require the identification of a specific person responsible (Contact Person) for communication and claims.

The contract with the factory in China in 2025 is not just a formality. legal protection in international transactions.
Errors in one point can result in the loss of a lot, money or rights to a product.

To minimize the risks, it is important to:

• inspect the factory before signing the contract;
• use a bilingual form;
• include all key conditions, from quality to intellectual property;
• Keep printed and electronic copies of documents.

A well-written contract is an instrument of trust and confidence.
It shows that you understand the rules of the Chinese market and are ready to work. on equal terms with the factories of China.