Court Orders Buyer to Pay CNY 344,605.90 for Paper Mesh
A Chinese court has ruled in favor of a mesh supplier in a contract dispute, ordering a paper manufacturer to pay outstanding payment of CNY 344,605.90 for delivered goods. The plaintiff, a mesh supplier based in Central China City, sued the defendant, a paper manufacturer based in Eastern China City, for unpaid invoices arising from multiple sales of paper-making meshes. The court rejected the defendant’s quality defense and a disputed delivery claim, but denied the plaintiff’s request for interest on delayed payment.
The dispute began in September 2010 when the defendant began purchasing various types of paper meshes, including forming fabrics, spiral dryer fabrics, and flat wire meshes, from the plaintiff. Over several transactions, the total invoiced amount claimed by the plaintiff reached CNY 441,174.90. The defendant made only one payment of CNY 50,000, leaving an alleged balance of CNY 391,174.90. The defendant argued that the total was incorrect, specifically questioning a delivery on December 10, 2011 which it claimed was not received by its staff. The defendant also asserted that all supplied meshes suffered from serious quality defects and that notes indicating quality problems had been made on the delivery receipts. The defendant sought to return 11 forming fabrics stored in its warehouse.
During the hearing, the plaintiff submitted seven delivery receipts and three value-added tax invoices. The defendant challenged the seventh receipt for the December 10, 2011 delivery, arguing that the signatory, Mr. Yu, operated a separate paper mill next door and was not an employee. The defendant also presented its copies of five delivery receipts which contained handwritten notations stating “the above goods have quality problems.” The court examined the evidence. It accepted the first six delivery receipts and the three VAT invoices, noting the defendant had already certified and deducted those invoices. However, the court declined to admit the December 10 delivery receipt because the plaintiff failed to prove Mr. Yu was authorized to receive goods on the defendant’s behalf. The court also rejected the defendant’s quality notations as unilateral statements, as the plaintiff’s retained copies did not contain similar remarks.
The court found that an oral sales contract existed between the parties. Based on the evidence, the court determined the defendant had received goods worth a total of CNY 394,605.90 and had made only a partial payment of CNY 50,000, resulting in an outstanding debt of CNY 344,605.90. The court held that the defendant was obligated to pay this sum. Regarding the plaintiff’s claim for interest on overdue payment, the court ruled that because no specific payment deadline had been agreed, the request for interest was not supported. The court further found that the defendant’s quality complaints were not raised within a reasonable time, that no quality standards were specified in the contract, and that the defendant offered no persuasive evidence of actual defects.
The court’s legal reasoning centered on the burden of proof for both delivery and quality. The plaintiff failed to establish that the disputed December 2011 delivery was made to the defendant, so that amount was excluded from the judgment. Conversely, the defendant’s quality defense collapsed because it did not object promptly and could not prove the goods were non-conforming. The court noted that the defendant’s acceptance and certification of the VAT invoices indicated it had acknowledged receipt and value of the earlier shipments. Under the Contract Law, the buyer must pay the price for goods actually received, and any quality claims must be timely and supported by evidence.
The court ordered the defendant to pay CNY 344,605.90 within five days of the judgment and dismissed all other claims. Court costs and preservation fees totaling CNY 6,210 were apportioned, with the defendant bearing CNY 5,805 and the plaintiff CNY 405. This case underscores the importance of clear payment terms in oral contracts and the necessity for buyers to document and communicate quality issues promptly. It also highlights that sellers must prove delivery to the correct party; ambiguous receipts may lead to disallowed amounts. Businesses engaged in similar transactions should ensure written agreements and maintain coherent delivery records.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.