Plastic Supplier Wins CNY 26,880 Judgment in Contract Case

A plastic trading company in Eastern China City sued an electrical appliance company for failing to pay for a shipment of acrylic plastic. The court ruled in favor of the supplier, ordering the buyer to pay the outstanding amount of CNY 26,880 plus interest on late payment. The defendant did not appear in court or present any defense.

The plaintiff, a plastic trading company, claimed that it supplied 1.2 metric tons of acrylic plastic, commonly known as transparent ABS, to the defendant at the defendant’s request. The total price was CNY 26,880. The parties had an oral agreement that payment would be made upon delivery of the goods and issuance of the invoice. The goods were delivered on September 14, 2011, and were received by the defendant’s warehouse manager, identified in the record as Mr. Liao. The next day, the plaintiff issued a VAT invoice for the full amount. Despite repeated demands, the defendant never made payment. The plaintiff filed the lawsuit on December 26, 2011, seeking payment of the principal plus interest from September 15, 2011, until the date of payment, calculated at the benchmark lending rate, and also requested that the defendant bear the litigation costs.

The court held two hearings in February and March 2012, applying the summary procedure. The defendant was properly served with the complaint and evidence but did not appear at either hearing. The plaintiff submitted a delivery note signed by the warehouse manager and the VAT invoice. The plaintiff also requested the court to investigate whether the VAT invoice had been used for tax deduction. The court confirmed with the relevant tax authority in Eastern China City that the invoice had indeed been deducted and certified. After reviewing the evidence, the court found it to be authentic, lawful, and relevant. Since the defendant did not respond or provide any counter-evidence, the court accepted the plaintiff’s evidence.

The court found that a lawful and valid sales contract existed between the parties. The plaintiff had delivered the goods, and the defendant was obligated to pay the agreed price. The facts showed that the defendant had received the goods but did not pay the CNY 26,880. The court held that the plaintiff’s claim for payment and interest was legally justified. Because the defendant failed to appear after proper summons, the court proceeded to a default judgment. The court ordered the defendant to pay the principal amount plus interest from September 15, 2011, until the date of actual payment, using the benchmark lending rate, and also to bear the court fees of CNY 235.

In its legal analysis, the court applied key provisions of the Chinese Contract Law. A contract becomes effective upon formation unless otherwise required by law. Both parties must fully perform their obligations in good faith. The buyer must pay the price according to the agreement; if no payment time is specified, payment is due upon receipt of the goods or the documents. The defendant’s failure to pay constituted a breach of contract, entitling the plaintiff to demand performance and compensation for losses. The court also applied the relevant article of the Civil Procedure Law allowing a default judgment when the defendant, after being summoned, fails to appear without justification. The judgment included a warning that delayed payment would result in double interest under the applicable enforcement rules.

This case demonstrates that oral sales contracts can be enforced when supported by documentary evidence such as delivery receipts and VAT invoices that have been verified by tax authorities. The court’s willingness to investigate the invoice certification strengthened the plaintiff’s position. The defendant’s decision not to participate did not prevent a judgment in favor of the plaintiff. The ruling also highlights that interest on late payment runs from the date payment was due, and