Small Claims Contract Dispute Results in Judgment for Feed Supplier of 8,585 Yuan

Small Claims Contract Dispute Results in Judgment for Feed Supplier of 8,585 Yuan

CASE OVERVIEW
A Chinese civil court in Northern China has ruled in favor of a feed supplier seeking unpaid amounts for livestock feed sold to a local farmer. The court ordered the defendant farmer to pay 8,585 yuan in outstanding payments after finding that the plaintiff had proven the existence of a valid sales contract supported by written debt instruments. The case illustrates the importance of documented evidence in contract disputes and highlights the legal consequences of failing to respond to a lawsuit.

CASE BACKGROUND AND FACTS
The plaintiff, Mr. Fan, operated a small shop selling Qinle brand livestock feed in a rural area of Northern China. Between February and September 2009, the defendant, Mr. Fang, purchased feed from Mr. Fan on five separate occasions. Each time, Mr. Fang issued a handwritten IOU or debt note to Mr. Fan acknowledging the amount owed. The total amount recorded on these five debt notes was 8,585 yuan.

After repeated requests for payment, Mr. Fang failed to settle the outstanding balance. Mr. Fan filed a lawsuit in November 2010 seeking payment of 10,860 yuan, which included an additional 2,275 yuan that Mr. Fan claimed was owed but was not supported by a signed debt note from Mr. Fang.

COURT PROCEEDINGS AND EVIDENCE
The case was heard by the Lantian County People’s Court under a simplified procedure. Mr. Fan appeared in court with his father acting as his representative. Mr. Fang did not attend the hearing despite being properly served with court notice.

During the trial, Mr. Fan submitted five debt notes signed by Mr. Fang, which clearly recorded the dates and amounts of each feed purchase. Mr. Fan also provided a personal record he had kept, claiming that Mr. Fang owed an additional 2,275 yuan. This personal record did not bear Mr. Fang’s signature.

COURT FINDINGS AND JUDGMENT
The court found that the sales relationship between Mr. Fan and Mr. Fang was legally valid and enforceable. Under Chinese contract law, once a seller delivers goods, the buyer must pay the corresponding purchase price. The court determined that the amount owed should be calculated based solely on the debt notes signed by Mr. Fang.

Regarding the additional 2,275 yuan claimed by Mr. Fan, the court rejected this claim. The court reasoned that the personal record kept by Mr. Fan lacked Mr. Fang’s signature and there was no other evidence proving that Mr. Fang had received feed worth that amount. The court therefore declined to accept this portion of the claim.

The court entered judgment ordering Mr. Fang to pay Mr. Fan 8,585 yuan within ten days of the judgment taking effect. The court also ordered Mr. Fang to bear the reduced court costs of 35.5 yuan. The judgment included a warning that failure to pay on time would result in double interest on the debt during the period of delayed payment.

KEY LEGAL PRINCIPLES
This case applies Article 159 of the Contract Law of the People’s Republic of China, which provides that a buyer shall pay the purchase price according to the agreed amount. Where no agreement exists, the price shall be determined according to market price or government pricing. The case also demonstrates that a seller bears the burden of proving the amount owed through reliable evidence. Unilateral records without the buyer’s acknowledgment are insufficient to establish a debt.

PRACTICAL INSIGHTS
For small business owners and suppliers, this case underscores the critical importance of obtaining signed written acknowledgments from buyers for each transaction. Handwritten IOUs or debt notes serve as strong evidence in court. Personal records kept by the seller alone, without the buyer’s signature, are unlikely to be accepted by a court. Additionally, the case shows that a defendant who fails to appear in court or submit a defense may still face a binding judgment. Sellers should also be aware that court costs are generally borne by the losing party, which can be a relatively small amount in simplified proceedings.

LEGAL REFERENCES
Contract Law of the People’s Republic of China, Article 159

DISCLAIMER
This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified legal professional for advice specific to their situation.