3. Failure to confirm a contract in a legally binding manner
Let’s say a manager signs your contract. It is not enough for two reasons:
That manager might not be the legal representative of the company it represents.
A signature is not always enough. It is important to require a chop (stamp).
Why is it risky?
It reduces your chances in case the relationship deteriorates and you try to sue them in China (remember, suing outside China is nearly always useless) to collect money.
What should you do?
Work with a lawyer specializing in China business, to draft your contract template and to clarify what you should look out for. Signing a contract without checking the Chinese version’s meaning is another common trick to avoid (read this recent article on the China Law Blog).