CNY 108,330.75 Shoe Material Supply Payment Dispute
A shoe material supplier in Southern China City brought a contract dispute against a local shoe manufacturer for unpaid goods. The plaintiff claimed the defendant owed CNY 108,330.75 for materials delivered over several months. After the defendant failed to pay and its legal representative fled, the court entered a default judgment ordering full payment plus interest.
The plaintiff, a sole proprietor producing shoe materials, began supplying the defendant company in 2011. The defendant issued warehouse receipts and settlement statements acknowledging the debts. On three separate occasions — April 21, June 23, and August 25, 2011 — the parties conducted reconciliations, with the defendant confirming outstanding amounts of CNY 20,550, CNY 34,870, and CNY 39,900 respectively. Between August 4 and September 16, 2011, the defendant also received additional goods worth CNY 13,010.75. Despite repeated demands, the defendant delayed payment, citing cash flow problems. In September 2011, the defendant’s legal representative, Mr. Huang, absconded, leaving the debts unpaid.
At trial, the plaintiff presented four categories of evidence: personal identification to prove standing, company registration documents to confirm the defendant’s legal status, three settlement statements and multiple warehouse receipts showing the total debt of CNY 108,330.75, and testimony from a witness, Mr. Wang, explaining how the warehouse receipts were created. The defendant was properly summoned but failed to appear or submit any defense. The court deemed the defendant’s absence as a waiver of its right to contest or cross-examine. After reviewing the evidence, the court found all exhibits authentic, lawful, and relevant, and admitted them into the record.
The court found that a valid sales contract existed between the parties. The evidence clearly showed that the defendant had accepted the goods and confirmed the outstanding balance through signed settlement notes. The total amount owed was precisely CNY 108,330.75, calculated from the three reconciliation sums plus the later deliveries. The defendant’s failure to pay constituted a breach of contract. The court ordered the defendant to pay the full amount within three days of the judgment taking effect. If payment was delayed, the defendant would be liable for double the statutory interest rate during the period of delay.
In its legal reasoning, the court applied Article 159 and Article 161 of the Chinese Contract Law, which require a buyer to pay the agreed price upon delivery or as per contract terms. Since the defendant had acknowledged the debts in writing and had no valid defense, the court determined that the plaintiff was entitled to immediate payment. The court also cited Article 130 of the Civil Procedure Law to justify proceeding with a default judgment when the defendant failed to appear without valid reason. The court further ordered the defendant to bear the litigation costs of CNY 2,467, which the plaintiff had prepaid.
This case highlights the importance of maintaining clear written records in commercial transactions. The plaintiff’s use of signed settlement statements and warehouse receipts proved decisive in establishing the debt, even though the defendant did not participate in the proceedings. The ruling underscores that Chinese courts will enforce payment obligations when documentary evidence is solid and the debtor fails to respond. However, recovering the judgment may be challenging if the defendant’s assets are already encumbered, as the plaintiff noted the company’s factory had been mortgaged to a bank.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.