Court Orders University to Pay CNY 321,415 for Stone Supply
Mr. Sui, the manager of a stone factory in Eastern China City, brought a lawsuit against Eastern University and Star Construction Group for unpaid stone supply. The plaintiff claimed that the university owed CNY 321,415 for stone delivered to several campus construction projects between 2003 and 2004. The university denied any direct contract with the factory, while the construction company said it had no involvement. After reviewing evidence and testimony, the court ruled that the university had formed an implied contract with the factory and must pay the outstanding amount plus interest.
In 2002, Star Construction Group contracted with Eastern University to build a new campus. The following year, Mr. Sui’s factory supplied stone for multiple university buildings, including an art building, an anatomy building, and laboratory blocks. The total value of the stone was CNY 651,415. At the time, Mr. Wang, the university’s head of infrastructure, gave a written promise that the university would pay the factory directly. The university made three partial payments totaling CNY 330,000, leaving a balance of CNY 321,415. The factory repeatedly demanded payment but received no further funds, leading to the lawsuit.
During the hearing, the plaintiff submitted several key pieces of evidence: the original promise letter signed by Mr. Wang, five settlement statements for the stone deliveries signed by university project supervisors, a bank document showing a CNY 150,000 payment from the university’s infrastructure office in 2004, and records proving the factory had purchased the stone from a third-party supplier. A witness, Mr. Han, testified that he had been sent by Mr. Sui to demand payment from university officials over the years. Both defendants challenged the authenticity and relevance of the evidence, arguing that no contractual relationship existed. The court, however, found that the documents were consistent and credible.
The court held that the evidence formed a complete chain proving an actual business relationship between the factory and the university. Although the settlement statements lacked the university’s official seal, they were signed by university project supervisors who confirmed the quantity and value of the stone delivered. The bank payment record further demonstrated that the university had made a direct payment for the stone, which could only have occurred in the context of a supply arrangement. The court also accepted the witness’s testimony, noting that Mr. Han had persistently contacted university officials to collect the debt, which served to interrupt the statute of limitations.
According to relevant law, a contract may be formed by conduct even without a formal written agreement. The university’s acceptance of the stone, its issuance of a promise to pay, and its partial payments all indicated an implied contractual obligation. The court rejected the university’s argument that Mr. Wang’s promise lacked authority, because his position as head of infrastructure gave him apparent authority to bind the university. The court also declined to dismiss the case based on the statute of limitations, as the factory’s repeated demands for payment constituted an interruption of the limitation period under Chinese civil law.
In this case, the court ordered Eastern University to pay the factory CNY 321,415 in principal and CNY 100,000 in interest calculated from January 2004 at the bank lending rate. The construction group was not held liable because no direct relationship existed between it and the factory. The ruling illustrates that informal commitments and course of conduct can create enforceable obligations in Chinese contract law. Businesses should keep clear records of all communications and payments to strengthen their claims in similar disputes.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.