China Contracts and How to Send Your Initial Draft to your China Counter-party

The other day I cleaned up and revised the various templates our China lawyers sometimes use to answer frequently asked questions we get from our clients. One of them is on how to send to the Chinese side of a deal the contracts we have drafted. Our standard answer is as follows:

It is usually best for you to send this contract to the Chinese side as an already signed sPDF. You achieve two goals by doing it this way. First off, the Chinese side cannot easily modify this without your seeing the modifications they have made. It is not unusual for Chinese companies to sign and return your signed Word document as though they did not make any changes when they actually did. Using a PDF makes this a lot less likely.

Second, your sending them the contract this way is essentially telling them, “please execute this without any changes so that we can move forward quickly.” If you send them a Word document you are all but inviting them to make changes to it.

I note though that in the last few years it has become customary to use a Word documents for China contracts because Chinese companies have started to make a lot of changes to their contracts. This is actually a good thing though because it means they now take their contracts very seriously and that in turn means they realize the courts there have gotten a lot better at enforcing them. All of this means that they don’t typically sign these planning to breach them.

So the current best strategy is for you to send them a signed PDF. Then, if they ask for it in Word format you can and should send them that. Just don’t send the Word document until they ask for it!

Your thoughts?

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.