How to motivate a non-responsive supplier?
When is the best time to initiate a legal course of action? (motivate a non-responsive supplier)
Below is a typical case for reference if you are considering legal action against a Chinese entity to motivate a non-responsive supplier.
I am in the middle of collaborating with a Chinese company which is located in Dalian China. The total order is for about $67,200usd (3x40’hq Containers) So far I have sent them about $16,800usd (25%) as advance. As of today, they are far behind on the delivery date, among many other issues I am facing in dealing with this company such as quality issues, false promises, deceits and lies and so on. I can give you further specific dates, documents & details later. The delivery date for all 3 containers was on March 15th or before, but as of today only one container has been shipped (which was also delayed shipping). My reason to contact you is to find out when would be the best time to initiate a legal course of action and your legal assistance? Should I wait for them to finish all the good and ship it out? Should I wait until I have received the goods and release documents in New York? If and or when should I pay the balance payment? What is the proper course of action? I would appreciate your response.
We see a lot of cases like that and offer some suggestions to motivate a non-responsive supplier:
A diplomatic and carefully crafted demand letter and follow up from a Chinese lawyer in Chinese to a Chinese company usually has two outcomes:
Possibility 1: the seller realizes you are serious and the dispute is resolved
Possibility 2: the seller stops all communications with you/lawyer and prepares for a court case.
Key points:
If the seller knows a court case is coming, they will probably try to use the remaining 2 containers as leverage. If you can risk a delay in having those ship until the dispute is resolved, then I would suggest you move forward with the demand letter and follow up conducted by our Chinese lawyers on your behalf.
I almost forgot, have you heard about www.SupplierBlackList.com? It’s a free website where buyers like you and I can post bad suppliers and expose them to the world.
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About the author: Mike Bellamy
Guest Blogger & Chibridge Advisory Board Member
Based in Asia since 1993
Founder of the PassageMaker family of companies
Business Lecturer at the China Sourcing Academy
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Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses. Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.
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