Dan Harris Harris & Moure, PLLC USA | China| Mongolia Asia Product Outsourcing Done Right

The Keys  Good manufacturer  Good contract  Good IP protection

Good Manufacturer Due Diligence The company's legal representative signed it. Chinese law provides that a company's legal representative has apparent authority to bind the company. This means that even if that representative lacks the actual authority to bind the company (maybe because the board of directors or the shareholders never gave the representative the authority to contract with you), the legal representative's signature will bind the company. There is, however an exception to this and that is when you know that the legal representative lacks the authority to bind the company. The contract is appropriately sealed. An appropriate seal (oftentimes called a chop) is applied to the contract. It does not matter who applies the seal, so long as it is the right seal. This means it must be sealed either with a contract seal that sets forth the name of the company or, as is more commonly done, with the Company Seal. Each Chinese company has only one company seal (no copies). Chinese companies are notorious for trying to get out of contracts by claiming they never actually signed them or that they were signed without the proper authority and so if your contract is big enough and important enough, you should consider doing all of the following to minimize even further the likelihood of the Chinese company seeking to get out of your contract: A signature from the company's legal representative. Of course, you must first confirm from the company's business license who exactly is the company's legal representative. A resolution from the company's board explicitly approving the contract and authorizing the legal representative to sign it. The affixation to the contract of the company seal or the company's contract seal.

Good Contract   Why bother?  What about corruption?

The Right Contract  NDA vs. NNN  OEM Agreement

The Good Contract In writing One language Excruciating detail Liquidated damage Attorneys’ fees? Dispute resolution Sealed

Where to Sue?  Most countries do not enforce U.S. judgments.  Most countries do enforce international arbitral awards.

Suing In China Document-based Cheap and fast (unless…) Nobody settles Low damages

Arbitration Clause Where? What law? Institutional or ad hoc? Fees? Language? Arbitrators’nationality?

Where to Arbitrate United States as no-go Hong Kong/Singapore/London Vancouver, New York CIETAC: Not so bad

CIETAC: Contract Clause Specify English language Specify non-Chinese arbitrator(s) Discovery Injunctive relief Third parties Notice

Protect your IP Trademark Patent Copyright

Dan Harris Harris & Moure, pllc USA | China | Mongolia