By:Global OEMs
In the domestic B2B transaction scenario, "whether a formal contract needs to be signed" is a confusion for many small and medium-sized enterprise (SME) owners. Some people believe that long-term cooperation does not require cumbersome procedures, while others think oral agreements are more efficient. However, senior industry practitioners and legal experts have clearly stated: it is strongly recommended to sign a formal procurement contract for domestic B2B transactions. This is not only an industry norm but also the core premise for protecting the legitimate rights and interests of both parties in the transaction.
A Contract is the "Legal Safety Lock" for B2B Transactions
B2B transactions often involve large sums of money, bulk goods delivery, or long-term service cooperation, with many transaction links, long cycles, and complex potential risk points. Oral agreements or simple orders can hardly cover all transaction details. Once a dispute arises, the rights and obligations of both parties are unclear and evidence is insufficient, making it easy to fall into a difficult position in safeguarding rights.
As a legally binding written document, a formal procurement contract, like a "safety lock", provides protection for the entire transaction process. According to the relevant provisions of the Civil Code of the People's Republic of China, a written contract can clarify the rights and obligations of both parties. In case of breach of contract, quality disputes, delayed payment and other issues, it serves as a key basis for safeguarding rights and interests, effectively reducing legal risks and communication costs.
These Core Clauses Are Indispensable to Avoid Future Disputes
A standardized B2B procurement contract needs to accurately cover the core elements of the transaction to avoid disputes caused by missing clauses. Industry experts remind that the following key contents must be clearly specified:
First, details of products or services, including specifications, models, quantities, quality standards, etc., to avoid "wrong goods"; second, price and payment methods, clarifying unit price, total price, payment cycle, and settlement methods to prevent delayed payment or amount disputes; third, delivery time, location, and acceptance methods, specifying performance nodes to ensure transaction progress; finally, breach of contract clauses, clearly stipulating the liability bearing methods for delayed delivery, payment default, unqualified quality and other situations, forcing both parties to perform in good faith.
SMEs Need to Pay More Attention to Build a Solid Foundation for Cooperation
Compared with large enterprises, SMEs have weaker risk resistance capabilities in B2B transactions and thus need to build a solid foundation for cooperation through formal contracts. In practice, many SMEs, due to neglecting contract signing, often struggle to safeguard their rights due to lack of effective evidence when encountering problems such as delayed payment and defective goods quality, ultimately suffering economic losses.
It is reminded here that for all B2B practitioners, regardless of the scale of cooperation or the closeness of the cooperative relationship, signing a formal procurement contract is a necessary link. A standardized contract can not only ensure transaction safety but also enhance the trust between the two cooperating parties, lay the foundation for long-term and stable cooperation, and help enterprises go further and more steadily in business transactions.
