What compensation can you claim against the Chinese suppliers who did not deliver goods?
We have met a lot of clients who purchased goods from Chinese suppliers but could not get the goods because the Chinese suppliers did not deliver the goods. After multiple unproductive talks, our clients usually had no option but to file claims against the Chinese suppliers.
If you bring a suit in China, what compensation will you get from the Chinese suppliers? You would probably love to raise the following claims against the opposite party:
To refund the payment that you have already paid;
To compensate your losses caused by the breach of contract, including the interests receivable after the performance of the contract;
To pay liquidated damages if a clause regarding the liquidated damages is included in the contractual terms between you and the opposite party.
In terms of the above point 2, the “losses caused by the breach of contract” can be the deposit you have paid or other expenses relating to contracting. With regard to the “interests receivable after the performance of the contract”, let us give you an example first. Let’s say your purchase cost is USD 5,000 and you are going to sell the goods with a price of USD 8,000. Then price differences are the “interests receivable after the performance of the contract”. To be brief, the “interests receivable after the performance of the contract” is the profits that you probably could earn if there was no breach of contract. Please kindly note that you are supposed to provide evidence to prove your losses, either your actural losses or acquirable interest losses.
Concerning the above point 3, under the circumstances where the parties to a contract agree on liquidated damages, you can seek actural losses, acquirable interest losses, as well as liquidated damages. But when the agreed liquidated damages exceed 30% of your losses, the court is likely to support the amount of 30% of your losses. If there is no agreed liquidated damage, you can only seek actural losses and acquirable interest losses.
The above is the compensation that you can claim in the lawsuit according to Chinese law. We have successfully assisted many clients to get the maximum benefit they can get, and have fully protected their rights and interests. If you also have the above situations, please do not hesitate to contact our professional lawyers.
Larry Zhou, Partner
Landing Law Offices China
Mobile& WhatsApp: +86 13342931852
Linkedin: Larry Zhou