U.S. Company VS. Chinese Company for Deposit Refund
A U.S. buyer paid a deposit on apparel against a Proforma Invoice; the Hangzhou seller failed to ship and resisted returning funds. SuitWin China Law Firm secured deposit, interest, and cost relief at the Yuhang District Court.
Background
A U.S. company imported a batch of clothing from a Hangzhou-based Chinese company. In June 2023, the U.S. company issued a Proforma Invoice to the Chinese company specifying the clothing styles, quantity, price, delivery, and payment terms. The agreement stipulated a 30% deposit and a delivery date of September 20, 2023.
Deposit paid and silence on terms
On July 10 of the same year, the U.S. company paid a 10% deposit to the Chinese company and sent remittance proof for confirmation. After receiving the payment the next day, the Chinese company merely stated it would process the order promptly and expressed interest in long-term cooperation, raising no objection to the deposit percentage. Subsequent communications also did not mention this matter.
Breach before litigation
Subsequently, the U.S. company repeatedly inquired about the shipment date and urged production. However, the Chinese company successively claimed it required 60 days for production and demanded changes to the unit price of the goods, consistently failing to ship as stipulated in the contract.
In October 2023, the U.S. company issued a formal demand to the Chinese company, requiring a response within a specified timeframe or else the deposit would be forfeited. The Chinese company did not respond.
Outcome
The U.S. company retained SuitWin China Law Firm to handle the case. Following proceedings at the Yuhang District Court in Hangzhou, the court ultimately ruled that the Chinese company must return the $40,000 deposit with interest and compensate for losses including attorney fees, notarization and certification costs, and translation expenses.