I must get some form of the following at least twice a week:
"I just received a shipment of bad product from China and the Chinese company is ignoring my requests for a refund. What do I do?"
Needless to say, my initial answer is always, "that depends" -- after all, I am a lawyer. It depends on the following:
- How much is at stake.
- The history of the relationship with the Chinese company.
- The city in which the Chinese company is located.
- The legitimacy of the Chinese manufacturer.
- The nature of the defects in the product.
- Whether there is a written contract and, if so, whether that contract clearly addresses the defect.
- What the contract says about dispute resolution.
Nine times out of ten, I pretty much instantly tell the caller/e-mailer that it makes no sense to involve my law firm, usually either because the amount at stake is too little or because there is no contract on which to base a legal claim. They then ask what they should do and I tell them to try to find a China licensed lawyer who will take the case on a contingency fee basis or just keep trying on their own. If they ask about involving "the Chinese government" or the US Embassy/Consulate, I tell them that if they want to try either or both of those things, they should, but that I am not aware of a single example where doing so has helped anyone.
I have learned that my advice is not terribly different from Mike Bellamy's, who wrote an article entitled, "Is It Too Late to Do anything if I receive bad quality products?"
Mike sets out five "essential check points," which he says if you cannot "check off," the best advise for you is probably just "to learn from your mistakes and do things right on your next order.
Mike writes that foreign buyers of Chinese product who have the following five items in place, "have a decent chance of negotiating a resolution that is acceptable":
- a signed / chopped contract that clearly defines what is the acceptable level of quality
- a clear paper trailing showing proof of payment
- the seller named on the contract matches the receiver of the payments. (With so many trading companies out there it is a common mistake to have a contract with a supplier but pay a trading company!)
- your supplier has physical and financial assets (small “one-man-bands” disappear as soon as they feel a lawsuit is on the way)
- the jurisdiction on the contract matches the location of the supplier’s assets at a city, province or country level.
He then adds that "it is always nice to have future orders you can leverage as well."
Good advice.
What do you think?
