What is a contract and what do I need in one?

Hi there,

Im just a novice in this business and Im just starting to learned about this business. I found a manufacturer in China that agree to make my items, now they are asking me to send a CONTRACT. I want to know if anyone out there knows about a CONTRACT, what is it and how to make it, any inclusion in it? Please I need help as I dont have any idea.

Thanks,

Hi camelot_604

A contract is an exchange of promises between two or more parties to do, or refrain from doing, an act which is enforceable in a court of law. It is a binding legal agreement. That is to say, a contract is an exchange of promises for the breach of which the law will provide a remedy.

You can read more about it on this link:

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Hope that helps.

Hi camelot_604,

What Richelle has given you here is basically the Websters Dictionary definition of contract. Which is correct but is too broad for your use.

You need to contact a contractual lawyer if you want to cover your behind 100% , however these guys cost $$$. If you have it great. If not come up with something similar to this. You should really put out a Registration of Interest to various manufacturers before settling on anyone. The ROI should cover

(1) What you want made and how many
(2) Materials to be used (you Stipulate)
(3) Manufacturing standards ie to USA standards Or Aust Standards
(4) Quality Control (company to demonstrate previous works)
(5) Delivery time frame (how long they have to make)
(6) Penalty clauses for inferior products or delivery not on time

You need to think through this carefully as a ROI is designed to get your item made to your requested standards and processes and with the required quality you expect.

Once you have an ROI send it out to however many manufacturers you wish so they can submit their offers to you. If you are looking at a country like China you can approach the Chinese Trade Commission for assistance in shortlisting prospective tenderers or which ever country you choose as they all have Trade Commissions designed to help their conutries companies export goods and services to the world.

Hope this helps

Good solid advice from Wes, only thing I would add is that you need to find a contract lawyer with international experience, as in Chinese law.

You will need something that can be enforced in the country if origin if your contract is to be worth the paper it is written on, and believe me, that will be expensive paper so you want it to provide you with value!

You really do need to seriously consider every aspect of this deal, and you really should be seeking GOOD legal advice, especially with your inexperience.

Good solid advice from Wes, only thing I would add is that you need to find a contract lawyer with international experience, as in Chinese law.

You will need something that can be enforced in the country if origin if your contract is to be worth the paper it is written on, and believe me, that will be expensive paper so you want it to provide you with value!

You really do need to seriously consider every aspect of this deal, and you really should be seeking GOOD legal advice, especially with your inexperience.

You beat me to it Fudjj.

Something like this would require a business trip. If I were going into a contract with any company, especially in Asia, I would buy a ticket and schedule a visit.

Quite honestly, If you don't, I think it might be considered an insult in that part of the world

There are certain customs and manners which should be considered when doing business in Asia.

Send them an email and say you would like to visit them. In some cases they would have you stay at their home and provide for all of your needs.

Yes if you do any dealings with an asian country then you really should visit the company and meet face to face. Also a tour of their manufacturing facility would be a good idea as well.

Setting up a blind contract is a very bad idea.

The other benefit to meeting in person, especially doing business in China, is that the Chinese way of doing business is very personal and one on one.

It is a sign of respect that you would meet with them in person, and while plenty of business is done in China without direct one on one contact, respect with your supplier will go a VERY long way to developing a good working relationship for the future.

Correct.. i work for LG Electronics, and I know this first hand... I'm also korean so I know a little bit about asian customs. Most all business transactions are done in person, or at least with a prior visit. Being an american and knowing the customs there too, this may seem like a slow and somewhat wasteful custom, but there are a lot of benefits that are not normally seen right away.

We are also more modernized and moving away from these traditional customs, however, one thing to note is that most asians are not as detailed over the phone or through email. The most detailed and information rich conversations happen in person. this is due to the nature of our language and our custom that people should be direct and to the point. This is the main reason people visit the factory or in person for business, because you end up getting more information than you would have via phone or email. Also it's easier to communicate since English is not their first language, and often times a lot gets lost in translation when using non personal forms of communication.

Just posting cause i'm bored and i really don't work that much :P

Hey Guys, I was away for a while so its only now I read your posting. Very big thanks to all your advice, pretty much appreciated. Now it makes me think twice or 3x about putting myself into contract. Actually what I want to buy in China is just a couple of hundred dollars of items not thousands, thats why I want to know why the manufacturer in china is asking me to send a contract, for just a few items.

Thanks
camelot_604