Feed Supplier Seeks Payment of CNY 59,701 in Contract Dispute

Mr. Li, a feed supplier, brought a lawsuit against Mr. Wang, a livestock farmer, for unpaid feed purchases totaling CNY 59,701. The dispute arose after Mr. Wang failed to settle his account despite multiple requests. The court ruled in favor of Mr. Li, ordering full payment plus interest at the prevailing bank rate.

According to the case background, the parties had an ongoing business relationship starting in 2010. Mr. Wang would take delivery of feed on credit and pay later. By January 21, 2012, Mr. Wang had accumulated arrears of CNY 59,701. He issued a handwritten IOU to Mr. Li confirming the debt. Despite repeated demands, Mr. Wang did not pay. Mr. Li then filed a lawsuit in early February 2012, seeking the principal amount plus monthly interest of 5 percent from February 10, 2012, and court costs.

At the court hearing on March 19, 2012, Mr. Li appeared in person and submitted the IOU as evidence. The document clearly stated the debtor, the amount, and the date. Mr. Wang was properly notified of the hearing but did not attend and offered no defense. The court examined the IOU and found it met all evidentiary requirements. Since Mr. Wang failed to appear, the court treated his absence as a waiver of his right to present evidence or cross‑examine.

The court held that a valid sales contract existed between the parties. By issuing the IOU, Mr. Wang acknowledged both the contract and the delivery of goods. The court found that he was obligated to pay the outstanding sum promptly. His failure to do so constituted a breach of contract. The court therefore ordered Mr. Wang to pay the full principal of CNY 59,701. However, the court rejected Mr. Li’s request for 5 percent monthly interest, stating that such a rate had no legal foundation.

In its legal analysis, the court cited provisions of the Contract Law and the Civil Procedure Law. Under Chinese law, a buyer must pay the price as agreed. Where no payment date is specified, payment is due upon delivery. The court determined that the appropriate measure of damages for late payment was interest calculated at the benchmark lending rate set by the People’s Bank of China. For the period starting February 10, 2012, the applicable rate was 6.10 percent per annum. The court also noted that Mr. Wang’s failure to appear did not prevent a default judgment.

The case summary reinforces the importance of maintaining clear written records in commercial transactions. The court enforced the IOU as a binding acknowledgment of debt and held the debtor liable for both principal and statutory interest. The defendant must pay within ten days of the judgment. If he fails to do so, he will face additional penalties for delayed enforcement. The plaintiff’s claim for excessive interest was dismissed, highlighting that courts will not award punitive rates without explicit contractual agreement.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.