China Manufacturing Contracts: When One Agreement Is Not Enough
A U.S. company recently called one of our international dispute resolution lawyers after receiving a message from its Chinese factory. Future orders, the factory said, would require a 34% price increase, effective immediately. The factory had the client’s molds. It had the client’s designs. And it had a customer list the client never should have left exposed.
Two years earlier, trying to “keep things simple,” this American company had signed one contract with its Chinese manufacturer that combined tooling, NNN, and manufacturing terms into a single document. When we reviewed it, the problem was obvious: too many overlapping provisions, not enough clear remedies. It was hard to tell what the contract was supposed to do when the factory breached.
