To strengthen employees' awareness of legal risks associated with contracts and enhance compliance management across procurement and sales operations, Plutools organized a specialized legal training session on "Risk Prevention in Industrial Procurement and Sales Contracts" on August 15, 2026.
The training was delivered by Lawyer Li, a partner at Shanghai Co-effort Law Firm and a doctoral candidate at Zhejiang University Guanghua Law School. Employees from the Procurement, Sales, Legal Affairs, and other relevant departments attended the training.
Focusing on Key Contract Clauses and Identifying Potential Risks
During the training, Lawyer Li provided a systematic overview of the 11 key clauses commonly found in industrial procurement and sales contracts, with reference to the Civil Code of the People's Republic of China and relevant judicial interpretations.
The session covered key areas including product specifications, quality standards, pricing and payment terms, packaging and transportation, product acceptance, warranty periods and quality assurance responsibilities, intellectual property rights, liability for breach of contract, contractual contact information, dispute resolution, and place of contract execution.
Lawyer Li emphasized that contract risk management is a systematic process and that preventing risks before a contract is signed is far more efficient and cost-effective than resolving disputes through litigation afterward.
He analyzed common risks associated with each key clause and provided practical recommendations. For example, regarding quality standards, he noted that simply stating "compliant with national standards" is insufficient. Contracts should instead clearly define quantitative specifications, applicable standards, and acceptance procedures, while also specifying which standard takes precedence when contractual requirements exceed applicable national standards.
Regarding payment terms, Lawyer Li provided an in-depth interpretation of the latest judicial guidance from the Supreme People's Court concerning "pay-when-paid" or "back-to-back payment" clauses, highlighting the legal risks associated with making payments to small and medium-sized enterprises conditional upon receipt of payment from a third party.
For liquidated damages, he also reminded participants that a higher penalty does not necessarily provide stronger legal protection. Under applicable judicial rules, an excessive portion of agreed liquidated damages may be subject to adjustment by the court.
Learning from Practical Cases to Strengthen Risk Awareness
The training also covered several practical issues, including the relationship between delivery locations and the transfer of risk, the distinction between inspection periods and warranty periods, the allocation of intellectual property infringement liability, and common issues involving dispute resolution clauses.
Lawyer Li particularly emphasized the importance of contractual contact information provisions. Although often overlooked, incomplete or outdated contact information can result in important notices being undeliverable and create difficulties in subsequent legal proceedings.
He recommended clearly specifying the address stated in the contract as the designated address for the service of legal documents by judicial authorities, helping ensure that important legal notices can be properly delivered.
Strengthening Compliance and Supporting Sustainable Growth
As a company specializing in core motion-control components for mobile robots, Plutools serves customers across multiple countries and regions. As the company continues to expand its business and strengthen its international operations, standardized and professional contract management has become increasingly important.
The training featured practical guidance, detailed case studies, and highly relevant examples. Participants noted that the session gave them a clearer understanding of potential risks in procurement and sales contracts and provided practical approaches to identifying and preventing those risks.
Going forward, Plutools will continue to strengthen its legal risk prevention and compliance management system, move risk prevention further upstream, and enhance the standardization and professionalism of contract management.
By building a stronger compliance foundation, Plutools aims to provide reliable support for the company's sustainable growth and long-term development.
