Court Orders Shoe Company to Pay CNY 29,322 for Unpaid Materials
A supplier of shoe materials has prevailed in a contract dispute against a shoe manufacturing company that failed to pay for goods delivered. The court in Eastern China City ruled that the defendant must pay CNY 29,322 in outstanding payments, plus costs and interest for delayed performance. The case highlights the legal remedies available when a buyer defaults on payment obligations.
The plaintiff, Mr. Zhang, operated a sole proprietorship producing shoe materials. From early 2011, he began supplying materials to the defendant, Bao Shoes Co., Ltd., a legally registered footwear manufacturer based in Eastern China City. According to the plaintiff’s claim, the defendant ordered materials through verbal agreements and issued internal warehouse receipts and payment settlement notes upon delivery. Despite repeated requests for payment, the defendant delayed, citing cash flow problems. Matters escalated in September 2011 when the company’s legal representative, Mr. Huang, fled abroad, leaving all debts unpaid. Mr. Zhang then filed a lawsuit demanding payment of CNY 29,322 and reimbursement of court costs.
At the hearing held on February 10, 2012, the plaintiff appeared through his authorized attorney, Ms. Zeng. The defendant, despite being properly summoned by the court, failed to attend without justification. The court proceeded with a default hearing. The plaintiff presented several pieces of evidence: his personal identification to establish standing; the defendant’s business registration and organization code certificate to confirm the company’s legal status; copies of payment settlement notes and warehouse receipts dated from May 16 to July 27, 2011, showing a total of CNY 29,322 in goods accepted; and testimony from a witness, Mr. Wang, who explained how the warehouse receipts were created and signed by the defendant’s staff. The defendant did not contest any of these materials.
The court examined the evidence and found it authentic, lawful, and relevant to the case. Since the defendant voluntarily waived its right to defend and cross-examine by not appearing, the court accepted all evidence submitted. Based on the records, the court determined that a valid sales contract existed between Mr. Zhang and Bao Shoes Co., Ltd. Between May 16 and July 27, 2011, the defendant received goods worth CNY 29,322, which it had not paid. The court held that the plaintiff’s claim was clear and supported by sufficient proof.
Under Articles 159 and 161 of the Contract Law of the People’s Republic of China, a buyer must pay the agreed price for goods received, and payment is due according to the contract or upon demand. The defendant’s failure to pay after the plaintiff’s demand violated these provisions. The court also noted that, per the Civil Procedure Law, a default judgment was proper because the defendant was legally served but chose not to appear. The court ordered the defendant to pay the full principal amount of CNY 29,322 within three days of the judgment taking effect, plus double the statutory interest for any delay in payment.
This case serves as a reminder that documented transaction records—such as signed receipts and settlement notes—are critical evidence in commercial disputes. It also illustrates the risks suppliers face when dealing with buyers who may become insolvent or whose legal representatives flee. The court’s enforcement of the plaintiff’s right to payment, even in the defendant’s absence, reinforces the principle that contractual obligations must be honored. Parties engaging in business should ensure clear written agreements and maintain accurate delivery and payment records.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.