As foreign companies increase the sale of their products in China, the potential for claims based on product defects increases. Claims based on contracts between foreign sellers and Chinese buyers are already a routine part of business with China, and Chinese consumers are making a growing number of claims against domestic retailers and manufacturers.
Chinese laws are now in effect that give Chinese consumers the legal basis to bring their claims.
The purpose of this article is to describe Chinese product liability law and to offer some suggestions concerning managing the potential liability. In their contract of sale, the foreign seller and the Chinese buyer may spell out their rights and obligations concerning product warranties and may apportion liability for claims between them. As a general matter, Chinese law will respect the intent of the parties to the contract. If the contract does not spell out the product warranties, Chinese law will supply some of the terms. Such liability arises out of the relationship between the seller and the buyer as parties to the contract.