Why Contract Terms Matter

When sourcing from China or Hong Kong, the contract is your first and strongest line of defence. China Sourcing International (CSI) acts as your advocate, ensuring that your sourcing agreements go beyond handshakes and price tags, protecting your product, your money, and your long-term supply chain.

This FAQ guide answers the most pressing questions businesses ask when negotiating with manufacturers and factories across China and Hong Kong. It reflects CSI’s role in defining, negotiating, and enforcing contract terms for you, our client.

CSI Terms & Cost Negotiation FAQs

What key contract terms does China Sourcing International negotiate with Chinese manufacturers?

CSI negotiates pricing, payment terms, production lead times, quality assurance standards, IP protections, and delivery conditions. Each term is customized to reflect your project scope and business priorities while maintaining the highest quality standards for production and products. At times, CSI may be able to work out a better rate of customs due to the Customs Coding set.

Will CSI help me avoid unfavorable terms that are common in factory-supplier contracts?

Yes. CSI’s expertise allows us to identify and eliminate hidden risks that are often found in standard supplier contracts. These risks may include things like vague quality definitions, one-sided payment clauses, and inadequate penalty provisions.

How does CSI ensure I get competitive pricing from factories in China and Hong Kong?

CSI benchmarks costs across multiple vetted factories, leveraging long-standing relationships and regional pricing knowledge. We break down costs into materials, labor, logistics, and markup to uncover hidden pricing and secure transparent, competitive quotes. Our local presence and multilingual negotiation team can drive more favorable terms than most businesses can secure independently. Call us at 1-888-915-1060 or Request a Quote

What kind of payment terms can I expect when CSI negotiates with suppliers?

Typically, CSI secures payment terms such as a 30% deposit and 70% upon shipment or post-inspection.

How are production delays handled in contracts negotiated by CSI?

CSI includes enforceable penalty clauses for late deliveries. These may include per-day fines, expedited shipping at the factory’s expense, or discounts for missed deadlines.

What intellectual property protections does CSI include in sourcing contracts?

Contracts negotiated by CSI include non-disclosure agreements (NDAs), non-use and non-circumvention clauses (NNNs), and factory-specific IP protection clauses, which limit the factory’s ability to reproduce, resell, or share your designs. We also sign with the vendor in Chinese and English, so there are no errors in translations.

The types of agreements include:

• Manufacturing Agreement – Sets production terms, timelines, and quality standards.

• OEM Agreement – For private label or white-label products.

• Supply Agreement – Long-term terms for regular supply, including pricing and quality.

• Tooling/Mold Ownership Agreement – Ensures you retain ownership of molds, even if they’re stored at the factory.

Will CSI include warranty or rework terms in the manufacturing agreement?

Yes. CSI ensures contracts contain rework obligations or refund policies for defective goods, based on defined AQL (Acceptable Quality Limit) standards. In many cases, CSI will arrange factory-funded re-production.

Does CSI structure the contract to align with international trade terms like FOB or CIF?

Absolutely. CSI clarifies International Commercial Terms (Incoterms) in all agreements and ensures that logistics responsibilities (FOB, CIF, EXW, etc.) are accurately defined, including transfer-of-risk points and insurance coverage.

How does CSI define and enforce quality control in the sourcing agreement?

CSI integrates quality check milestones into the contract, including pre-production sampling, in-line inspections, and final AQL-based pre-shipment reviews. We ensure all standards are binding, not just informal.

What role does CSI play in resolving disputes with a supplier?

CSI acts as your local advocate. We’ll mediate directly with the factory and escalate as needed. Our bilingual legal team can engage in third-party arbitration in China if contractual remedies are not honored.

Can CSI negotiate smaller Minimum Order Quantities (MOQs) for start-ups or low-volume projects?

Yes. CSI often negotiates reduced MOQs by leveraging long-term relationships with factories or bundling client orders. This flexibility is especially valuable for product testing or market entry phases.

What happens if the supplier doesn’t follow the agreed terms?

CSI enforces compliance rigorously. Our contracts include penalty provisions, and our on-the-ground sourcing team ensures accountability through ongoing audits and performance reviews.

Will CSI tailor the contract structure to meet international compliance standards?

Yes. CSI aligns every contract with relevant regulatory and import/export standards in your country, ensuring RoHS, CE, REACH, and other industry-specific compliance is reflected in all technical specs and legal terms.

About China Sourcing International

China Sourcing International helps global businesses navigate the complex world of manufacturing in China and Hong Kong. With bilingual teams on the ground, industry-specific sourcing experts, and 20+ years of factory relationships, we deliver trusted solutions, ensuring a reliable process from the factory floor to the port.

To schedule a consultation, call CSI at 1-888-915-1060 or Request a Quote.