Export agentHow to respond when companies withhold payment?

When an agency company withholds payment citingcustoms clearance"Defects" or "document issues" as reasons, the following steps are recommended:

• Review contract termsConfirm the payment terms stipulated in the agency agreement, paying special attention to the definition of liability for breach
• Initiate written communicationFormally request the counterparty to provide legal basis for the deduction within the agreed timeframe through official correspondence
• Apply for asset preservationFor large amounts involved, apply for pre-litigation asset preservation under Article 101 of the Civil Procedure Law

Can service fees be recovered after payment if the agency fails to perform?

According to the 2023 Supreme Peoples Court Interpretation on Application of Laws in the Trial ofExport agentContract Dispute Cases, Article 6 stipulates:

• The refund of service fees must meet three conditions:
  • The agent has committed fundamental breach of contract
  • The principal has performed major contractual obligations
  • There exists a direct causal relationship between the breach and the frustration of contract purpose
• Recommended evidence collection includes:
  • Payment vouchers and invoices
  • Written records of the agents non-performance
  • Documentary proof of actual business damages

Should arbitration or litigation be chosen for cross-border trade disputes?

Recommended dispute resolution methods based on the nature of the dispute:

• Advantages of international arbitration:
  • Awards enforceable in 160 New York Convention contracting states
  • Arbitrators are more familiar with trade practices
  • High procedural confidentiality
• Applicable scenarios for court litigation:
  • Emergency cases involving asset preservation
  • Counterparty has executable domestic assets
  • Dispute amount below arbitration cost baseline (typically under 500,000 CNY)

How to protect rights when encountering agency company bankruptcy?

According to Article 113 of the Enterprise Bankruptcy Law, the following measures are recommended:

• Immediately file creditor claims with supporting evidence
• Circumstances for asserting reclamation rights:
  • Payment funds held in joint custody accounts
  • Clear documentation of goods ownership
  • Funds not commingled with bankrupt enterprise assets
• Pay attention to the liquidation group announcement and exercise voting rights in a timely manner

How to prevent fund risks in agency services?

Based on twenty years of practical experience, it is recommended to establish a three-level risk prevention and control system:

• Contract level:
  • Include provisions for joint custody accounts
  • Establish a performance bond mechanism
  • Clearly define the calculation method for breach of contract liabilities
• Operational level:
  • Implement phased payment of service fees
  • Require agents to purchase professional liability insurance
  • Establish a key milestone reconciliation system
• Legal level:
  • Specify favorable dispute resolution venues
  • Include attorney fee shifting clauses
  • Improve the evidence preservation system

What to do when funds cannot be recovered due to force majeure?

According to Article 590 of the Civil Code, special attention should be paid to:

• Timely fulfill notification obligations (recommended using registered mail + email)
• Collect officially issued force majeure certificates
• To claim loss sharing, the following must be proven:
  • Direct causal relationship between the damage and force majeure
  • Necessary loss mitigation measures have been taken
  • Legal basis exists for the counterparty to share the loss