One of the things our international manufacturing lawyers always tell our clients that source product from China is to be specific. We talk about how China has levels of quality five levels below anything most would even think possible and for Chinese manufacturers, those levels are normal.
We mention how you can buy shirts (unbelievably cheaply) in China that are pretty much ruined after one washing. We tell them of the company that sought our assistance after receiving USD $500,000 of computer bags with handles that broke pretty much every time they were used to tote a laptop. Or we tell about the company that contacted us when its massive order of Christmas tree lights would not be delivered until mid-December. In both cases, the US companies had failed to be specific. In the laptop bag case, the Chinese manufacturer essentially told us that if the US company had wanted bags strong enough to hold a laptop, they should have paid more for them.
We talk about the Spanish company that reached out to our international dispute resolution attorneys after discovering its Chinese manufacturer was selling its rejected and unsafe product around the world and it had no contract or trademarks that might stop this.
I thought of all those things today after reading Documents Unsealed in Chinese Drywall Lawsuit. The article’s first paragraph says it all:
Knauf Plasterboard Tianjin, a major Chinese drywall manufacturer, urged one of its U.S. customers, Banner Supply, to sell thousands of sheets of foul-smelling drywall “overseas” after Banner complained about the tainted product, according to documents and depositions unsealed by a Florida circuit court judge in Miami-Dade County. A Banner executive said the offer was refused.
If you are outsourcing the manufacturing of your product to China and you get bad product, the first thing the Chinese manufacturer usually claims is that the product you received is “good enough.” When that does not work, the Chinese manufacturer usually then suggests you simply sell it for less. When that also does not work, the next suggestion is usually for you to sell it somewhere other than in the United States.
The best way to avoid these sorts of problems is to always be clear in your manufacturing contract on your quality standards and on the penalties your Chinese manufacturer will incur for not meeting them. It is not really this simple, but this is the minimum you must do to have a good shot at avoiding problems and having real solutions if problems should arise.