Cement Contract Dispute – Court Awards CNY 96,640
A recent court decision in Eastern China City resolved a commercial dispute over unpaid cement deliveries. The plaintiff, a sole proprietor operating as a building materials supplier, sued the defendant, a project manager, for breach of a cement purchase contract. The court found the contract valid but adjusted the claimed amount and modified the interest calculation, granting partial relief to the plaintiff. The case highlights the importance of clear pricing terms and proper documentation in construction supply agreements.
The dispute arose from a cement supply arrangement dated July 2009. The defendant, Mr. Chen, was the project manager for a wine company’s factory construction in Eastern China City. He entered into a written cement purchase contract with the plaintiff, Mr. Liang, a sole proprietor. The contract specified a base price of CNY 320 per ton, with a note that prices were subject to market fluctuation and mutual negotiation. It allowed for an initial credit of 200 tons, with payments due within four months after the last delivery. Mr. Liang delivered 302 tons of cement by December 2009, as evidenced by delivery notes signed by a site representative, Mr. Wang. After the defendant failed to pay the remaining balance of CNY 99,660, Mr. Liang filed a lawsuit in September 2011 seeking the unpaid amount plus interest at 1.5% per month from January 2010.
During the hearing, the plaintiff presented several pieces of evidence. These included a copy of the written contract, 30 delivery notes (some signed by Mr. Wang), and a written statement from Mr. Wang confirming that all 302 tons of cement were used in the wine company project and that Mr. Chen was the responsible project manager. The defendant was properly served with notice but did not appear in court. After the hearing, the court summoned Mr. Wang, who provided the original contract and confirmed that Mr. Chen had delegated him to receive and sign for the cement deliveries. The court accepted the evidence as authentic, relevant, and lawful, and proceeded to make its findings.
The court held that the cement purchase contract was legally valid and binding on both parties. Under the contract, the defendant was obliged to pay for the delivered cement. However, the court found that the plaintiff had not proved any price increase through mutual negotiation. The contract stated a base price of CNY 320 per ton, and without evidence of an agreed adjustment, the court calculated the total payment at 302 tons times CNY 320, amounting to CNY 96,640. The plaintiff’s claim for CNY 99,660 was therefore excessive. Regarding interest, the contract allowed for monthly interest of 1.5% on overdue amounts after the four-month payment period. Since the last delivery occurred on December 16, 2009, the four-month period ended on April 16, 2010. The court therefore ordered interest to run from April 17, 2010, not from January 2010 as the plaintiff requested.
In its legal analysis, the court emphasized the importance of contractual interpretation and the burden of proof. The plaintiff bore the responsibility to show any price adjustment, and failing that, the original price prevailed. The court also noted that the defendant’s absence did not prevent a decision; under procedural law, a default judgment could be entered where the defendant failed to appear after proper service. The interest clause was strictly enforced according to its terms, starting only after the agreed credit period expired. The court further rejected the plaintiff’s claim for interest from an earlier date, as the contract clearly linked the interest obligation to the four-month grace period after the final delivery.
In summary, the court ordered Mr. Chen to pay Mr. Liang CNY 96,640 in principal plus monthly interest at 1.5% from April 17, 2010 until the date of payment. The plaintiff’s additional claims were dismissed. The court also allocated costs, with the plaintiff bearing a small portion and the defendant the majority. This case serves as a practical reminder for suppliers to ensure that all price modifications are documented in writing and that interest calculations align strictly with contractual timelines. For construction project managers, it underscores the risk of default judgments when failing to respond to legal proceedings.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.