Contracting in China: A Contract Worth the Paper it's Written On

Abstract

Supply chain contracts in developing markets such as China were once not worth the paper they were written on. As the market and legal systems matured, however, savvy organizations started to use supply contracts to protect the integrity of their global supply chains. In this article we address the legal and strategic steps that a successful supply chain contract in China follows, so that it is well written and the Chinese supplier is more likely to read, understand, and actually comply with it. When such recommendations are followed, a Chinese court will also be more likely to understand and enforce that supply chain contract.

Keywords: China, Contracts, Supply Chain, Strategic Contracting, Contractual Enforcement