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Pitfall 10: No Liquidated Damages Clause

Part 10 of 21 Pitfalls to Avoid When Sourcing from China.

The Pitfall

No agreed penalty for breach and no clause for recovering legal costs.

Why It's Dangerous

Breach damages are hard to prove, and legal fees are usually not recoverable in China.

How to Avoid It

Include a liquidated-damages clause and a clause that the breaching party bears legal fees.

Sourcing from China? Get it right from the start.

Our Chinese lawyers review suppliers and contracts before you commit — and recover your losses if a deal goes wrong.

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