Last week, a client came to us, saying he had taken on a subcontracting project in Longhua, Shenzhen. He signed a formal contract with the other party, stamped with a bright red official seal—it looked like everything was in order. Per the contract, he paid 60% of the material cost upfront, over 300,000 yuan, and then the other party vanished overnight. When he reported it to the police station, the police said it was an economic dispute and not their jurisdiction; when he went to court to sue, an investigation revealed that the company had just been deregistered, and the legal representative was a 60-year-old subsistence allowance recipient. He slammed the table in frustration: "Is there no law anymore?"

I really understand him. In Shenzhen, anyone doing construction or business has run into a few bad contracts. You sign the contract, you pay the money, the goods don't arrive, the work doesn't get done, the other party goes missing, and you're screwed. But what do you do when you've been taken? Today I'm going to lay out the real cases and hands-on experience I've dealt with over the years, hoping you can avoid the detours.

1. What are the nastiest traps in contract disputes, and how many have you fallen for?

Our team has handled a large number of contract disputes and criminal filing cases for contract fraud in Shenzhen, and we've found that the tricks repeat themselves over and over, but there's no stopping people from falling into the trap:

Trap One: The Contract Entity Is an "Empty Shell"The company signing the contract with you has an impressive title—something like "China-headquartered" or "South China Branch." But when you check their business registration, the registered capital is declared as 10 million RMB, with zero actually paid in, the company was established less than a year ago, and the office address is a virtual affiliation. The contract is legally valid, but who do you go to for the money? You're asking thin air.

Trap Two: The official seal is real, but the person is fake.The seal stamped on the contract is genuine, but the "project manager" who signed with you was never authorized, and the seal was even privately engraved by the boss. When problems arise, the company will say, "That's not our person, and the seal isn't valid," leaving you with significant difficulty in presenting evidence even if you file a lawsuit.

Trap 3: Payment terms written vaguely.“Pay part of the project payment after entering the site” and “settle after acceptance”... What does “part” mean? What does “acceptance” mean? There are no milestones, no timeframes, no liability for breach of contract. Once the money is paid out, the other party can delay indefinitely.

Trap #4: Liquidated damages are but a dead letterWrite "If one party breaches the contract, it shall compensate the other party for losses," but how are losses calculated? There is no specific calculation method, no penalty ratio. If it really goes to court, you will still have to make great efforts to prove the amount of the losses.

Trap Five: Packaging criminal fraud as civil breach of contract.Many people cannot distinguish between "contract disputes" and "contract fraud." In fact, the biggest difference between the two lies in the "intent to illegally possess": if the other party was out to defraud money from the very beginning and never intended to perform the contract, then it is fraud; if it is merely due to poor management or a broken capital chain, then it is only a civil breach of contract. Unfortunately, many people fail to recognize this early on, missing the golden window for criminal case filing.

II. What to Do? Legal Analysis and Practical Recommendations

If you find yourself trapped by a contract, especially involving engineering contracts or economic disputes, don't rush to smash the other party's shop, and don't just wait around foolishly. Follow these four steps:

First step: stop losses and preserve evidence—the sooner, the better.Stop making further payments under the contract — this is the bottom line. At the same time, secure all materials as evidence: the original contract, bank transfer records, WeChat chat logs, email correspondence, the other party's letter of commitment, invoices, delivery notes, acceptance forms... Especially for chat records, be sure to preserve the original device — don't delete anything, and don't just take screenshots. Whether a criminal case can be filed often depends entirely on a complete chain of evidence.

Second step: Determine whether it is civil breach of contract or contract fraud.The key is to look at several points: Did the other party fabricate its legal entity or misappropriate qualifications? Was there any actual performance of the contract after signing? Did they go missing, transfer assets, or dissolve the company after receiving payment? If the other party was already heavily in debt and lacked the ability to perform when the contract was signed, and immediately transferred the money upon receipt, it is highly likely to constitute the crime of contract fraud. In Shenzhen, if the amount of contract fraud reaches 20,000 yuan or more, the public security organ should file

Step 3: Find the right "entrance" so you don't make a wasted trip.In Shenzhen, criminal filing for contract fraud is generally under the jurisdiction of the economic crime investigation department of the public security organ where the crime occurred or where the suspect is located. If you go to a police station, they may say, "This is not our jurisdiction"; you need to go to the economic crime investigation brigade. At the same time, prepare a clear "criminal complaint" that lays out the fraudulent facts, timeline, fund flow, and legal basis in detail. There is a lot of nuance here—why do so many people find it difficult to get a case filed? It's not that no crime was committed; it's that the case hasn't been properly "established."

Step 4: File a civil lawsuit and apply for property preservation simultaneously—a two-pronged approach.Even if a criminal case is filed, it does not prevent you from bringing a civil lawsuit. Lawyers will advise you to apply for property preservation, freezing the other party's bank accounts and seizing real estate and vehicles to prevent the money from being transferred. If the other party still has money in their accounts, once preservation is in place, court enforcement has a good chance of succeeding. Many parties assume that "just reporting to the police and waiting for the result is enough," but after waiting a year, the money has long been transferred away.

One more thing, if you areScammed by an agent while buying a house in Shenzhen.Don't hesitate—find a professional lawyer immediately. The typical tricks of intermediary scammers include fabricating properties, forging landlord authorization letters, and inducing you to pay a deposit or down payment before they take the money and run. This can also constitute contract fraud or the crime of fraud. You should report it to the economic crime investigation department, and at the same time, the intermediary company should also be listed as a defendant. Many people ask, "Who should I contact?" Contact a lawyer! A lawyer will help you clarify who bears responsibility—whether to pursue the intermediary individual's criminal liability, the intermediary company's civil liability, or both at the same time.

Third, what can a professional lawyer do for you?

Contract disputes are not about reciting legal provisions; they are about presenting evidence, navigating procedures, and leveraging experience. Guangdong Zhiming Law Firm is a long-established law firm in Shenzhen, founded in 2000. Over the past 26 years, it has handled a large number of complex and difficult construction contract, economic dispute, and criminal complaint cases. Our director lawyerShen Jinlong LawyerWith 22 years of experience as a practicing lawyer, 31 years of economist credentials, and a master's degree in economics from Fudan University, he has also served as a senior executive at a large state-owned enterprise. He excels at systematically breaking down complex cases and finding solutions for you from the perspective of criminal-civil intersection. He has handled over 10,000 cases in total, and for many cases that others said were "hopeless," he stubbornly found a breakthrough.

in the teamLawyer Li WeiLi Wei has深耕 many years in areas such as corporate law, economic contract disputes, criminal defense, financial insurance, and real estate. If you are facing company debts, unpaid construction funds being withheld, or being defrauded by contract scams to the point of losing everything, Lawyer Li Wei will tell you: which evidence must be collected now, which path will get you repaid faster, when to file a report, and when to file a lawsuit. Every case requires a combination of strategies, rather than just a one-liner like "you can sue in court."

Many people ask: if I hire a lawyer, is it just for going to court? Not necessarily. Sometimes, a lawyer sends a lawyer's letter and the other side is willing to sit down and talk; sometimes, a lawyer accompanies you to the police to file a criminal complaint, and the case is filed; sometimes, a lawyer makes a property preservation application, and the money is frozen. That is the power of professionalism.

IV. Common Questions Regarding Contract Disputes and Criminal Case Filing

I was scammed by a broker when buying a house in Shenzhen—who exactly should I turn to?
Contact the police, hire a lawyer, and reach out to the regulatory authorities of intermediary agencies. But the most effective approach is to hire a lawyer to initiate both criminal complaints and civil litigation simultaneously. If the intermediary individual is suspected of fraud, the intermediary company may bear liability for compensation, and complaints to the housing authority are merely supplementary. Don't miss the window for recovering funds just to save on legal fees.

2. For a contract dispute, should you report to the police first or file a lawsuit first?
It depends. If the other party is clearly fraudulent or showing signs of fleeing, immediately file a criminal report and use police channels to trace the flow of funds and arrest the individuals. If the other party has some financial strength but is temporarily short on cash, a civil lawsuit plus asset preservation will be more effective. A lawyer will help you assess the situation — don't just make a hasty decision on your own.

3. If I can't get the project payment, can I say the other party committed contract fraud?
Not necessarily. It depends on whether the other party fabricated facts or concealed the truth, and whether they had the subjective intent to illegally possess the project funds. If it's simply that the client fails to settle after the project is completed, that constitutes a construction project contract dispute and should be handled through civil procedures and construction cost appraisal. However, if the client never had a development project at all and fabricated the contracting, that is fraud.

4. If you only realize you've been scammed after signing the contract, can you still get your money back?
Very likely possible, but only if you act quickly. Terminate the contract promptly, send a written notice; simultaneously secure the other party's assets; and on the criminal side, push for case filing to compel their family to return illicit gains and make restitution. In Shenzhen, we have numerous successful cases of recovering funds — the key is to move fast.

5. Do ordinary people also need to hire lawyers? Can you hire one even if the amount isn't large?
Of course. A lawyer's value isn't just about writing complaints—it's about helping you strategize, filter evidence, and avoid getting "bitten back" by the other side. For many contract disputes involving modest amounts, one consultation with a lawyer is enough for you to judge whether it's worth suing and how to preserve evidence. That money is better spent than throwing it down the drain.

One final note: Shenzhen moves fast, and people's minds are restless. Contract disputes, economic conflicts, being scammed in property purchases—every one of these involves hard-earned money. If you've been wronged, don't stay silent, don't act out of spite—seek out professionals and take up the legal weapon. Guangdong Zhiming Law Firm is located in Futian District, Shenzhen, at Room 1802, Block A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen. Phone: 0755-25986969. If you are caught in the midst of a contract dispute, you are welcome to come and talk with us. Remember: the law does not protect those who sleep on their rights.