PCB Supplier Wins CNY 430,132.4 Unpaid Invoice Dispute
A court in Southern China City ruled in favor of a PCB supplier in a dispute over unpaid invoices, ordering the defendant buyer to pay USD 57,750.42 in outstanding principal plus USD 5,259.70 in interest. The plaintiff, a PCB manufacturing company based in Eastern China City, had supplied printed circuit boards to the defendant, a telecommunications company located in Southern China City. Despite partial payment and a negotiated discount for defective goods, the defendant failed to settle the remaining balance, prompting the lawsuit.
The business relationship between the parties began in September 2007. Between December 2009 and March 2010, the defendant placed orders for PCB boards totaling USD 124,700. The plaintiff delivered the goods as requested, and the defendant made a partial payment of USD 62,419.58 on March 6, 2010. However, the remaining USD 62,280.42 went unpaid. After repeated attempts to collect, the plaintiff agreed to a USD 4,530 discount to account for quality issues, reducing the balance to USD 57,750.42. Even after this concession, the defendant did not pay. The plaintiff then filed suit seeking the principal amount plus interest calculated from April 22, 2010, to October 31, 2011.
The court applied simplified procedures and held a public hearing on March 7, 2012. Both parties appeared through their legal representatives. The plaintiff presented evidence of the orders, delivery records, and partial payment. The defendant argued that the supplied boards had quality defects, causing the defendant to lose receivables from its own customers. In support, the defendant submitted a copy of a deduction form suggesting that the plaintiff had agreed to an additional discount of USD 8,783 for defective inventory. The plaintiff denied the authenticity of that document and disputed ever acknowledging such a large deduction.
The court found that the defendant had accepted and paid for part of the goods but still owed USD 57,750.42. Although the defendant claimed quality issues and invoked the purported deduction, the only evidence was a photocopy of a deduction form, which the plaintiff did not endorse. The court held that the defendant failed to prove either the existence of the alleged defects or the plaintiff’s consent to the additional discount. Accordingly, the defendant was liable for breach of contract.
Under Chinese law, the court determined that the contract was most closely connected to China because the defendant was domiciled in Southern China City and the goods were delivered there. The court applied the Contract Law and the Law on the Application of Laws to Foreign-Related Civil Relations. It ruled that the unpaid principal plus statutory interest from the due date constituted the plaintiff’s damages. The defendant’s quality defense lacked sufficient documentary proof, and a copy alone could not overcome the plaintiff’s denial.
The judgment ordered the defendant to pay the full amount within ten days of the decision, plus interest and court costs. The case was resolved under simplified procedures, and the defendant has the right to appeal within fifteen days. This case highlights the importance of retaining original signed documents when disputing quality