Most importers believe they have a contract with their Chinese supplier. What they actually have is a one-page proforma invoice, written in the factory’s template, in the factory’s language, on the factory’s terms — and it says almost nothing about what happens when the goods are wrong.
That document is fine for ordering. It is close to useless for resolving a dispute. And disputes are where the margin goes. If you have already been through one, the escalation path in our guide to getting refunds and compensation from Chinese suppliers will look familiar — nearly every step of it depends on what was written before the deposit.
This guide is the paperwork layer of sourcing: what a PI really is, the twelve terms that carry the weight, which three are skipped most often, and how to get a factory to stamp a document that actually protects you without turning a $12,000 order into a legal project.
What you are actually signing when you pay a deposit
A proforma invoice is an offer. It lists the item, quantity, unit price, trade term, payment schedule, lead time, and bank details. That is enough to move money. It is not enough to define an obligation.
Read the small print on a typical one. You will usually find a line like “quality as per confirmed sample” — with no sample referenced by date, no tolerances, no sampling plan, and no remedy. You will find a force majeure clause broad enough to cover “material shortage” and “production schedule conflict.” You will find disputes resolved in the factory’s local court, in Chinese, under a legal system you have never used.
None of that is malicious. It is just the default. Defaults favour the party who drafted the document, and that party is not you.
The asymmetry in one sentence: the PI tells you what you are buying and what you will pay. It does not tell the factory what counts as acceptable, what happens if it is not acceptable, or who pays when it is not.
The twelve terms that do the work
You do not need a fifty-page agreement for a $15,000 order. You need a short purchase order with annexes, and you need these twelve points in it. Everything else is decoration.
| # | Term | What to write | Why it matters |
|---|---|---|---|
| 1 | Specification annex | Drawing or spec sheet with dimensions plus tolerances, material grade and supplier of resin/fabric, weight, colour reference (Pantone), surface finish | “As per sample” is unenforceable in practice. Numbers are. |
| 2 | Quality standard and AQL | State the inspection standard and sampling plan, typically general inspection level II with 2.5 major / 4.0 minor defects — confirm the exact plan with your inspection company | Converts “bad quality” into a pass/fail decision someone can defend |
| 3 | Golden sample | One signed, dated, sealed sample held by each side; photos from four angles attached to the PO | The reference everyone argues about, in physical form |
| 4 | Tooling and mould ownership | Moulds, dies, jigs, screens and fixtures paid for by the buyer are buyer property, with a right to retrieve them, and a per-day retention fee if the factory delays release | Without this clause you rent your own tooling forever |
| 5 | IP and exclusivity | Buyer owns artwork, designs, packaging files and any developed IP; factory will not sell your design or use your mould for others | The cheapest defence against a copy appearing on the same marketplace |
| 6 | Packaging specification | Carton dimensions and board grade, units per carton, barcode placement and symbology, master carton label format, pallet configuration, drop-test requirement | Prep-centre rejections and FBA chargebacks start here |
| 7 | Delivery definition | An actual date, plus what triggers it — goods loaded on board at the named port, or handed to your forwarder at the factory | “45 days” means nothing if nobody defined day one |
| 8 | Remedy ladder | Ranked outcomes: rework, replacement, price credit, or rejection — with who pays freight at each step | Turns a shouting match into a sequence |
| 9 | Milestone payments | Deposit against PO, balance against inspection pass or copy bill of lading — never the full amount before goods exist | Your only real leverage is money not yet sent |
| 10 | Sub-supply and substitution | No subcontracting and no material substitution without written approval; name any approved subcontractors | The factory you audited is often not the factory that made the goods |
| 11 | Documents and certification | Who obtains test reports, declarations and certificates, who pays, and a holdback released only when the documents arrive in usable form | Missing paperwork can stop a container at the border regardless of product quality |
| 12 | Governing law and forum | Named forum (a specific arbitration institution or court), language of the contract, English text controlling, notices by email to named people | Decides whether a claim is worth pursuing before you ever have one |
The three that are skipped most often — and cost the most
1. Tooling ownership
A private mould might cost a few thousand dollars, or tens of thousands. Buyers pay it, then discover eighteen months later that the mould lives at the factory, has no written owner, and cannot be moved without the factory’s cooperation — which is exactly what you will not get during a dispute.
Write three things: the mould is buyer property identified by a serial number stamped into it; the factory will release it within a stated number of days of a written request; and the buyer may have it collected and shipped at the buyer’s cost. Then photograph the mould, note the serial, and keep the invoice that shows you paid for it.
The same logic applies to print screens, die-cut formes, embroidery files, and injection tooling for secondary parts. If you paid, name it.
2. A tolerance-level specification, not a description
“Stainless steel bottle, 500ml, matte finish” is a marketing line. A factory can deliver exactly that and still hand you something you will reject: wall thickness at the bottom of the range, lid threads that leak at 0.2 bar, a matte finish that scuffs in transit. This is also where vague quotations hide their real cost — the line items a factory leaves out are usually the ones that reappear as a price increase before shipment, as covered in how to decode a Chinese factory quotation.
The specification annex is where you convert preference into requirement. Capacity with tolerance. Weight with tolerance. Leak test pressure and duration. Coating adhesion method. Colour to Pantone with an acceptable Delta-E. Every number you add is a number you can inspect against, and a number the factory cannot argue with later.
3. Certification responsibility and document delivery
Most compliance failures I see are not product failures. They are document failures — a certificate that names the wrong model, a test report covering a different material, a declaration signed by someone with no authority, or a document that simply never arrives until the week the shipment is due.
Name the documents in the PO, name who pays for the testing, name the deadline relative to shipment, and hold back a defined slice of the balance until you have them in hand and in the right name. That single holdback changes behaviour more than any email.
Not legal advice: contract enforceability, arbitration, and product regulation vary by jurisdiction and change over time. Treat this as commercial practice, have counsel review anything above your normal order size, and rely on the official text of any regulation or standard rather than a blog summary.
How to get it stamped without a negotiation war
The most common reason importers operate without terms is that they tried to send a long agreement and the factory went quiet. There are better moves.
Send your own PO, not their contract
You are not asking the factory to renegotiate its standard contract. You are placing an order on your paper. A purchase order of two pages plus two annexes — specification and packaging — is a normal business document that a sales manager can approve without involving anyone senior.
Reference the PI in the PO: same item, same price, same quantity. Nobody has to concede anything to sign it.
Keep it bilingual, and say which text controls
A Chinese translation raises the chance of a stamp and lowers the chance of a later argument about what a phrase meant. Add one line: English version controls in case of discrepancy. If the factory insists the Chinese controls, read that version carefully — a mistranslated remedy clause is worse than no clause, because it looks like protection.
Get the chop, not just a signature
In practice, the company seal is what makes a document binding on the factory. Check three things: the company name on the seal matches the name on the business licence and on the bank account you are paying; every page is stamped or initialled; the person signing has authority, which for anything unusual means the boss, not the export salesperson.
If you have been dealing with a trading company, confirm in writing whether they manufacture or subcontract. That answer changes who your counterparty is, and it belongs in the contract, not in a WeChat scroll.
Match paperwork to risk
| Order type | Reasonable paperwork | Non-negotiable |
|---|---|---|
| Catalog item, small deposit, repeat supplier | PO with spec annex and AQL line | Golden sample, inspection before balance |
| Catalog item, new supplier | PO plus packaging annex plus pre-shipment inspection | Milestone payment, remedy ladder |
| Custom product or private label | Full twelve-point PO with IP and tooling clauses | Tooling ownership, IP, no-substitution |
| Private mould plus brand launch | Above plus a short master agreement and NDA | Tooling retrieval right, exclusivity, forum |
Red flags during the paperwork conversation
- “We never sign buyer POs.” Common enough not to be fatal on a catalog order, and a hard stop on custom tooling. Ask what they will sign, then work from that document.
- Refuses to put tolerance numbers in writing. Usually means the process cannot hold them. Better to learn that before the mould is cut.
- Wants 100% payment before production. Occasionally legitimate for very small custom runs; normal practice is a deposit with the balance against readiness or documents.
- Cannot say where the goods are made. If the answer to “which factory?” is vague, you are buying from a trader who may switch sub-suppliers between runs.
- Insists disputes go to a court in their city, in Chinese only. Sometimes standard, but it tells you the realistic cost of ever enforcing anything. Price that risk in.
- Amends the PO after stamping. Any change needs a new stamped version. Quiet edits to quantity or spec are a pattern, not an accident.
The paperwork sequence that actually works
The Bottom Line
The factory is not going to volunteer terms that cost it money. Your proforma invoice will keep saying “quality as per sample” for as long as you let it, because that sentence costs the factory nothing and protects you from nothing.
Twelve terms, two annexes, one chop. It takes an afternoon to prepare and it is the difference between a supplier who owes you a remedy and a supplier who owes you a conversation.
If you want the short version to work from, the sourcing guide below includes the PO structure, the specification annex format, and the inspection standard we use before releasing a balance.
Put the terms in writing before the deposit goes out
The free China sourcing mini-guide includes the PO checklist, specification annex format, and pre-shipment inspection standards we use on every order — the paperwork that makes a supplier obligation enforceable in practice.
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