China Purchase Order Essentials: 10 Terms to Include Before You Pay
A one-page purchase order is the whole contract for most China orders. These ten terms — specification, payment, Incoterms, inspection, warranty and dispute resolution — decide who wins when things go wrong.
Most China orders are governed by a single purchase order, not a negotiated 20-page contract. That is fine when the order goes smoothly, and brutal when it does not — because every dispute ends up being decided by whatever the PO did and did not say. These ten terms are the ones worth getting right before any money moves.
The ten terms
- Exact specification — product name, model, material, dimensions, color, packaging and any reference sample, with photos and tolerances attached.
- Quantity and price — unit price, total price, currency, and whether the price is fixed or subject to adjustment.
- Payment terms — the deposit, the balance, and the trigger for each payment (e.g. 30% deposit, 70% against a pre-shipment inspection report), with the supplier's bank details matching the contract party.
- Incoterm and delivery — the chosen Incoterm (FOB, CIF, DDP), the port or place, the shipping date and any delay liability.
- Quality standard and inspection — the acceptance criteria, who inspects, and whether acceptance happens pre-shipment or on arrival.
- Warranty and returns — the warranty period, what is covered, and who pays return freight for defects.
- Intellectual property — a clause confirming the buyer owns the product design, molds or brand, and that the supplier will not sell or copy them.
- Confidentiality — an obligation to keep the buyer's designs, pricing and customer information confidential.
- Governing law and dispute resolution — the law that governs, and the forum (arbitration or court) with a seat and rules actually specified.
- Signatures and company details — the full legal name, Unified Social Credit Code and authorized signatory of both parties.
The three terms buyers most often skip
In our experience reviewing China purchase orders, three omissions cause a disproportionate share of disputes: no inspection clause (so 'quality' is never defined), no dispute-resolution clause (so the forum is anyone's guess), and a payment instruction that does not match the contract party (so recoverability collapses). All three are cheap to fix at the PO stage and expensive to fix after.
Tie the deposit to a signed PO and a verified company, and tie the balance to a passing inspection or shipping documents — never to a verbal promise.
A practical checklist before you sign
- Confirm the supplier's full legal name and Unified Social Credit Code appear exactly as registered.
- Attach the specification sheet and reference sample as part of the order.
- State the Incoterm and the delivery date explicitly, with a consequence for delay.
- Include a pre-shipment inspection right and a warranty period.
- Name the governing law and the arbitration or court forum — a clause that just says 'Chinese law' without a forum is half a clause.
This content is general information and does not constitute legal advice. Purchase-order terms should be tailored to your product and situation by a licensed attorney before you commit funds.
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