Court Orders Delivery of Oil Heaters in CNY 309,552 Dispute
A court in Eastern China City has ruled in favor of a plaintiff in a processing contract dispute, ordering the defendant to deliver 2,643 oil heaters and return 150 packaging cartons or pay compensation. The case involved a spraying processing agreement between an individual contractor and an electric appliance company. The plaintiff, Mr. Li, had sought delivery of products valued at approximately CNY 309,552 after the defendant failed to fully fulfill a debt settlement arrangement.
In 2009, Mr. Li and the defendant, Eastern China City Electric Appliance Co., Ltd., signed a spraying processing rental agreement. Under that agreement, the defendant provided workspace, and Mr. Li purchased his own spraying equipment to process products for the company. The agreement was set for five years but ended in June 2011. One month later, the parties settled accounts. The defendant confirmed it owed Mr. Li CNY 789,027.27 for processing work. They signed a payment agreement requiring the defendant to pay CNY 250,000 in cash and deliver 4,052 oil heaters to cover the remaining CNY 539,027.27. The heaters were priced at CNY 133 each. To support the delivery, Mr. Li supplied 4,668 power cords at CNY 4.30 each and 4,701 cartons at CNY 11.80 each, totaling CNY 75,544.20. The defendant paid the cash and delivered 1,963 heaters but refused to deliver the remaining 2,089 units.
During the court hearing, Mr. Li presented the spraying agreement and the payment agreement to prove the debt and the terms. He also submitted two certificates showing the defendant received the power cords and cartons, with unit prices confirmed by the defendant’s employee. The defendant submitted four delivery notes showing Mr. Li had picked up 1,963 heaters and two photographs of heaters with the plaintiff’s trademark still in the defendant’s warehouse. The defendant argued that the plaintiff had not collected the remaining heaters. The court found the plaintiff’s evidence credible and noted that the defendant did not dispute the quantities of cords and cartons, only the prices. However, since the defendant’s own staff had written the prices and the defendant had already agreed to convert the value of those supplies into 567 heaters, the court accepted the plaintiff’s figures. The court rejected the defendant’s photographic evidence because it could not clearly show the number of heaters.
The court held that the spraying processing rental agreement was essentially a valid processing contract. Both parties had voluntarily entered into it, and Mr. Li had performed his processing obligations. Under the settlement payment agreement, the defendant was required to deliver all 4,052 oil heaters. Having delivered only 1,963, the defendant owed 2,089 heaters. Additionally, the parties had agreed that the value of the power cords and cartons would be converted into an extra 567 heaters, bringing the total owed to 2,656 heaters. The defendant also agreed to return 150 cartons, which would offset 13 heaters. Therefore, the court found that the defendant must deliver 2,643 heaters (2,656 minus 13) and return the 150 cartons. If the defendant could not deliver the heaters or return the cartons, it would pay compensation at CNY 133 per heater and CNY 11.80 per carton.
According to relevant law, specifically Articles 44, 60, 109, 251, and 263 of the Contract Law of the People’s Republic of China, a lawfully formed contract is binding from its creation, and parties must fully perform their obligations. If one party fails to pay, the other may demand payment. In processing contracts, the customer must pay the agreed price. The court reasoned that the defendant’s failure to deliver the remaining heaters constituted a breach of the payment agreement. The court also noted that the plaintiff had the right to choose delivery or compensation, as stated in the judgment. The defendant’s argument that the plaintiff had not picked up the goods was not supported by reliable evidence.
The court ordered the defendant to deliver 2,643 qualified oil heaters to the plaintiff within three days of the judgment taking effect, with the plaintiff responsible for pick-up, and to return 150 packaging cartons. If the defendant fails to deliver the heaters or return the cartons, it must pay compensation at the agreed rates. The defendant also bears the court costs of CNY 3,300. This case highlights the importance of clear settlement agreements and documentation in commercial processing disputes. Parties should ensure that all terms, including delivery methods and price calculations, are recorded in writing. The judgment provides a practical example of how courts enforce debt settlements that use product delivery in lieu of cash payment.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.