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8 Phrases You Should Never Use With Your China Manufacturer
Jacob Yount just did a very helpful post on outsourcing manufacturing to China. The post is entitled, 8 Phrases to Eliminate in Your China Sourcing, and it calls for eliminating the eight phrases so as to improve your China sourcing successes. Jacob has worked in China sourcing for more than a decade and his tips are good ones. Below I list out in bold Jacob’s eight phrases to ban from your lexicon and then provide my own analysis. At the end of this post, I add a few (more legal) ones of my own. 
1. The supplier should’ve known to do this… Guess what, many Chinese manufacturers do not even know to what use your product will be put. You should assume that they do not know anything but what you specifically tell them and if it is at all important, you should tell them in writing and in Chinese.
2. Why did the supplier not tell us? Consider it your job to monitor and to find out.
3. This is wrong, get it right! I am just going to borrow directly from Jacob on this one: “Provide the factory with evidence, detailed specs and mocked-up photos to show what to correct. If necessary send physical samples.” In other words, it is your job to explain.
4. Your price is super high! Sometimes it is super high because the Chinese factory (for various reasons) wants nothing to do with you. Sometimes it is super high because you failed to explain sufficiently want you were seeking to do. In any event, I agree with Jacob that you should give the factory cost ranges before they price for you.
5. We’re disappointed / angry / unhappy. Just flat out not helpful.
6. We just want it perfect. See my number 5 above.
7. We have to rush these. Do you want it done fast or do you want it done right?
8. This is not acceptable. Explain.
And here my three favorites:
1. Reasonable Quality/Workmanlike Job/Industry Standards/Reasonable Time. Phrases like these are meaningless in a country where you can buy a t-shirt for 35 cents that will be lucky to survive two washes. I would argue that a 35 cent t-shirt that survives one wash is of reasonable quality for the price. The point here is that there are all sorts of gradations of quality in China that are lower than many of us can imagine and therefore these terms are of no value. I will also note that these terms — unlike in the United States — have no legal meaning. If you want quality from your China supplier, your written contract should state exactly what that means. If you want a laptop bag strong enough to hold a laptop, you should list out the specific tensile and strength requirements your supplier must provide you to be in conformity with your China OEM Agreement.
2. We will resolve all disputes by working in cooperation with each other. You will? Really? In what world does it happen that every problem between businesspeople gets resolved by their having a friendly meeting or two? We are increasingly seeing this language in manufacturing contracts that are coming across our desk — always after the American side has encountered a major problem and now wants to retain us (rather than before when we would have instantly exorcised this language from the contract). These American companies are telling us that their Chinese manufacturer put this language into the contract and they did not want to challenge it because they did not want to appear to aggressive or to look like they were expecting problems. We read these provisions as an enforceable agreement not to sue under any circumstances.
3. We will base it on our relationship. This one is not a contractual one, but it is one that we often hear. One of our China lawyers will suggest to one of our clients that we put such and such a provision into the contract and our client will respond by saying, “is that really necessary, our Chinese counterpart thinks that should just base that on our relationship?” No, you cannot. The whole reason for writing a contract when the relationship is good is so that you can memorialize things now just in case things go bad.
Any more?
The post 8 Phrases You Should Never Use With Your China Manufacturer appeared first on China Law Blog.
We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.
Source: http://www.chinalawblog.com/2015/05/8-phrases-you-should-never-use-with-your-china-manufacturer.html
