Common Mistakes Foreign Sellers Make

1. Invoices Cannot Replace Contracts

In most small-value international trade disputes we handle, only an invoice exists, without a contract. People often assume an invoice is the same as a contract — but there is a difference. An invoice typically contains only core terms such as product, quantity, price, payment method and delivery date. Compared to a contract, it lacks important clauses such as breach-of-contract clauses and dispute resolution clauses. If a dispute arises, the lawsuit can only be filed in the court where the defendant is located, and only damages can be claimed — penalties for breach and attorney fees must be borne by the plaintiff. This is very disadvantageous for small-value disputes, where attorney fees sometimes exceed the amount claimed. If both parties sign a contract stipulating that the breaching party bears attorney fees, this can materially reduce losses.

2. A Written Contract Is Essential

In the event of a dispute, a written contract is the most direct and important evidence. Without one, parties must prove the existence of the transaction and its terms through emails, chat logs, witness testimony, shipping documents and invoices — evidence whose probative value may be weak and difficult to form into a complete chain. The authenticity, completeness and relevance of electronic evidence may be questioned, and witness testimony may be subjective and uncertain.

3. Inconsistent Receiving and Signing Companies

Clearly defining the contracting party — a seemingly simple issue — can become a troublesome problem. Many foreign clients sign contracts in English due to language barriers. But companies registered in China only have Chinese names and no official English names; English names are often arbitrarily translated by suppliers, and multiple companies may share the same English name. Every company in China has a registration number — if the contract is in English, the registration number must be included to avoid confusion.

4. Invoices or Contracts Without Seals

There are significant differences between China and foreign countries in the use of seals and signatures. In China, official seals carry significant authority and legal validity, while signatures are typically supplementary. In Western countries, signatures are the primary method of confirmation. In contracts between Chinese companies, affixing an official seal is generally considered a formal expression of the company's will and carries strong evidentiary weight. Personal signatures can be valid independently in some situations, but in company matters they are usually used in conjunction with an official seal.

5. Mistaking Trading Companies for Factories

Many foreign buyers contact sellers claiming to be "factory direct" through Alibaba International Station, trade shows or B2B platforms. But the actual trading partner may be a "trading company" (middleman) that purchases from other factories and resells, profiting from the price difference. Buyers who fail to verify the supplier's true identity — factory qualifications, production capacity — may face uncontrolled product quality, delayed delivery, insufficient capacity and difficulty tracing responsibility.

6. Blindly Trusting Product Videos, Packing Lists and Customs Declarations

Some buyers rely solely on supplier-provided videos, packing lists and customs declarations to confirm the goods' condition. These materials are easily tampered with or forged. Suppliers may pre-record videos of other batches of qualified goods, or use editing and staged photos. Packing lists prepared by the supplier may contain errors unless verified on-site by a third-party inspection agency. Customs declarations only prove the goods were declared for export — they do not guarantee quality or conformity with the contract.