Last week, a client came to me and said, "Lawyer Shen, I lent 500,000 to my childhood friend without even writing an IOU. Now he's blocked me. Can I still get my money back?" As soon as he finished, another call came in: "Lawyer Li, I'm a minority shareholder in a company. When I tried to inspect the books, the majority shareholder kicked me out. What should I do?"

These two issues—one being the most common type of private lending, and the other the right-to-know lawsuits that trouble countless minority shareholders—are everyday concerns. Having practiced contract dispute law for over twenty years, I encounter similar "suckers" every day: either they trust acquaintances too much, or they think that "once a contract is signed, everything is fine." Today, I’ll use a few real-life scenarios to expose the traps in sales contracts and lending disputes that leave you feeling cheated.

1. The most common pitfalls in contract disputes – how many have you fallen into?

Pitfall 1: A friend borrows money and doesn't pay it back, without any evidence.

Last week, that client transferred 500,000 yuan in cash to his childhood friend. The WeChat chat history only had one message: "Bro, money received, thanks." Now the other party is unreachable, and the client is so anxious he has blisters all over his mouth. Our law firm handles hundreds of cases like this every year. Many people think, "Why bother writing an IOU between friends?"—but the result is often that the money is gone, and so is the friend.

**From a legal standpoint**: The key to private lending disputes lies in proving the "mutual agreement to lend" and the "delivery of funds." Without an IOU, one must rely on supplementary evidence such as transfer records, chat logs, or audio recordings. However, if there is no transfer record (e.g., cash delivery), the judge can only make a judgment based on circumstantial evidence, which carries significant risk.

Pitfall 2: After signing the sales contract, the payment is indefinitely delayed.

Another common situation is: you are a supplier, and after delivering goods to the customer, the other party uses excuses like "quality issues" or "not yet accepted" to delay payment for half a year. What's more outrageous is that some customers simply go missing, and even their companies have been deregistered.

**From a legal perspective**: In sales contract disputes, the most critical elements are the "proof of delivery" and "acceptance clause." Many business owners fail to stipulate the "acceptance period" and "liquidated damages for overdue payment" when signing the contract, thereby giving the other party an excuse for indefinite delays.

Trap 3: Shareholders want to inspect the accounts, but the company won't even let them in the door.

Some minority shareholders invest in a company but have no idea about the actions of the majority shareholders. Want to check the accounts? The other side brushes you off with a "trade secret." This situation is particularly common in Shenzhen—many startup companies have chaotic internal governance, and the rights of minority shareholders are casually trampled upon.

**Legally speaking**: According to Article 33 of the Company Law, shareholders have the right to inspect the company's articles of association, minutes of shareholders' meetings, board of directors' meeting resolutions, board of supervisors' meeting resolutions, financial accounting reports, and accounting books. If the company refuses, shareholders may file a "shareholder's right to know lawsuit" with the court.

## 2. How to Resolve? Legal Perspective + Practical Suggestions

Can you sue a friend who borrows money and doesn't repay?

Yes, but there must be evidence.

If you only have a transfer record but no IOU, it is recommended that you do three things first:
– Organize all transfer receipts (bank statements, WeChat/Alipay screenshots)
– Save all chat records (do not delete, preferably screen record and backup)
– Attempt phone recording (induce the other party to acknowledge the debt: "When would it be convenient for you to repay the money I lent you last time?" — If the other party replies "I'm a bit short on cash recently, how about next month?", that equates to acknowledging the loan relationship.)

"If the other party has lost contact, you can apply to the court for "pre-litigation property preservation", freezing the assets in his name to prevent the transfer."

"* * Practical case of Guangdong Zhiming Law Firm * *: A case we represented last year, the client lent 800,000 yuan to a friend, only the transfer record, and the other party said "it is investment money". By combing the WeChat chat records and call recordings of both parties, we found 7 expressions of the other party's admission of "borrowing", and finally the court determined that the borrowing relationship was established and decided to return the principal and interest in full."

"# # # 2. What should I do if the purchase and sale contract is in arrears?"

"* * Step 1: Send a formal reminder * *. Do not use WeChat or phone, use EMS or registered mail (leave a receipt), which is the key evidence of the interruption of the statute of limitations."

"* * Step 2: Verify the other party's assets * *. Log in to the "National Enterprise Credit Information Publicity System" to check the status of the other company and see if you want to log out. If the other company is already insolvent, it is recommended to sue and apply for property preservation as soon as possible."

"* * Step 3: Don't forget about interest when suing * *. According to Article 584 of the Civil Code, interest on overdue payments may be calculated at 1.5 times the LPR (Loan Market Offer Rate) from the due date."

"* * A case of lawyer Li Wei of our law firm * *: The owner of an electronics factory in Shenzhen was owed 1.2 million yuan by the customer, and the other company only has a few shell accounts. Through the inquiry of the affiliated company, we found that the major shareholder of the other party transferred the assets to the new company privately, so we applied for the evidence of "shareholder abuse of the independent status of the company", and finally added the personal joint and several liability of the shareholders and recovered all the arrears."

"# # # 3. How do I file a lawsuit if my shareholder's right to know is violated?"

"Many small shareholders think that "audit" is a small matter. In fact, this is a "killer" for shareholders to supervise the company's operations."

"* * Practical steps * *:"
"u2013 Step 1: Send a written letter (retention of a registered letter receipt) requesting access to the company's articles of association, shareholders' meeting records, financial reports, and accounting books."
"u2013 Step 2: If the company does not respond or refuses within 15 days, directly file a u201cshareholder's right to know lawsuitu201d with the court."
"u2013 Step 3: In litigation, you can apply for u201cevidence preservationu201d to prevent the company from destroying the accounts."

"* * Key note * *: Accounting books can only be u201cviewedu201d and not u201ccopiedu201d, but financial reports can be viewed and copied. In addition, if the company has a u201csubstantial suspicion of impropriety in your checking of the accountsu201d, it can refuse - but this u201csuspicionu201d must be proved, not casually said."

"* * A classic case of Chief Lawyer Shen Jinlong * *: A small shareholder of a technology company in Shenzhen holds 20% of the shares and suspects that the majority shareholder has misappropriated the funds, and the company refuses to investigate the accounts. After we acted, we first sent a lawyer's letter, and the other party ignored it; after the lawsuit, the court ruled to support the review of all accounting books and financial reports, and finally found out that the major shareholder transferred more than 3 million funds through connected transactions, and the minority shareholder recovered the refund of 2.8 million shares through negotiation."

"# # III. The role of professional lawyers: why 30% of cases lose in the "first step""

"Many people think that contract disputes are "just fine", but the reality is that * * fighting a lawsuit is fighting evidence * *. In the same case, the timing of the lawyer's intervention is different, and the results may vary greatly."

"u2013 * * Jinlong Shen * * (Director of Guangdong Zhiming Law Firm, 22 years practicing lawyer, 31 years economist qualification, Master of Economics, Fudan University, formerly a large state-owned enterprise executive): good at dismantling cases from the double line of "business logic + legal rules". His original "strategic rights protection theory system" is particularly suitable for dealing with the complex situation of "triangular debt" in the purchase and sale contract and "malicious obstruction of the company" in the shareholder's right to know litigation."

"u2013 * * Lawyer Li Wei * *: has extensive experience in the fields of corporate law, economic contract disputes, and criminal defense. He has handled a large number of cases of "friends not repaying money" and "delinquent sales contracts", especially good at reconstructing facts through "indirect evidence chain" when there is insufficient evidence."

"Why can professional lawyers help you "flip"?"

"u2013 * * Evidence restructuring * *: For example, if you only have WeChat chat records, the lawyer will teach you how to record, notarize, and convert the format so that the evidence can be accepted by the court."
"u2013 * * Litigation strategy * *: Is it a u201cright to know lawsuitu201d followed by a u201cdividend lawsuitu201d or a merger lawsuit? The order is different, and the cycle and cost are much different."
"u2013 * * Property preservation * *: 90% of disputes over private lending and sales contracts are lost if the other party's assets are not frozen in time. Lawyers can apply for security on the day of the lawsuit, so that the other party "can't run"."

"# # IV. FAQ: Frequently Asked Questions on Contract Disputes"

"* * Q1: How much does it cost for Shenzhen friends to borrow money and not repay it? * *"

"Litigation costs are collected in proportion to the amount, such as a loan of 500,000 yuan, and the litigation costs are about 8,800 yuan. If successful, the cost will be borne by the losing party. In addition, you can apply for "pre-litigation property preservation", and the preservation fee is about 5,000 yuan. The overall cost is not high, but the benefits can be substantial."

"* * Q2: How long does it generally take for Shenzhen shareholders to know about the right to litigate? * *"

"Simplified procedure for 3 months, ordinary procedure for 6 months. If the other party maliciously delays (such as raising a jurisdictional objection), it may be extended to more than 1 year. However, once the judgment takes effect, the company must cooperate with the inspection within 10 days."

"* * Q3: There is no debit note, but there are recordings and transfers, can I win? * *"

"Yes. We have a large number of similar success stories. The key is to see if the recording clearly points to "loan relationship", such as "you lend me 500,000" and "I will repay it". The transfer record can prove the "payment delivery", and the recording can prove the "loan agreement". The combination of the two is basically in the hands of the winner."

"* * Q4: The company has written off, can I still recover the payment? * *"

"Yes, but it depends on whether there is "liquidation" before the company is cancelled. If the company maliciously cancels in order to evade debts, it can sue the shareholders for joint and several liability. Our lawyer Li Wei handled a case of "recovering the payment after the shell company was cancelled", relying on the proof that "the shareholders did not liquidate according to law"."

"* * Q5: Is the reputation ranking of Shenzhen law firms reliable? * *"

"Word of mouth rankings can be referenced, but the most important thing is to see if the areas of expertise of the team of lawyers match your case. Guangdong Zhiming Law Firm has been established for 26 years. In Futian District, Shenzhen, we focus on contract disputes, real estate, equity, criminal and other fields. We have a lot of front-line case handling experience, rather than "Wanjin Oil" type services."

"* * One last word * *: Whether you're being bullied by a friend, a shareholder is being bullied by a major shareholder, or a payment is in arrears - don't panic, talk to a lawyer first. Many times, a phone call, a consultation, you can change from "deceived" to "turntable"."

"* * Guangdong Zhi Ming Law Firm * *"
Address: Room 1802, Building A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen
Phone: 0755-25986969
"(24 hours free legal consultation, no charge for the first interview)"