A Shenzhen contract dispute lawyer tells you: if the other party breaches the contract and fails to pay, don't rush to file a lawsuit—do these 3 things first.

Last week, a client came to my office, and the moment he walked in, he slammed the table: "Lawyer Shen, I've been screwed over! The contract was signed, the goods were shipped, and the other party hasn't paid a single cent. I went to court to sue, and the judge actually asked me if I had any evidence of debt collection — how would I have any evidence? Does WeChat chat history count?" He was sweating profusely, clutching a stack of delivery orders and a purchase and sale contract signed crookedly in his hand. I had him sit down, poured him a cup of tea, and asked him, "Did you send him a WeChat message demanding payment?" He paused for a moment: "I did, and he replied 'Got it.' Does that count as evidence?" I nodded: "It counts, but you need to prove that WeChat account belongs to him."

I encounter this kind of scenario almost every week. There are many businesspeople in Shenzhen, and with that comes many contract disputes. But the pitfalls most people fall into are, time and again, just a few common ones. Today, I'll break down the three most typical pitfalls for you in detail, and then tell you exactly what to do when you run into a "deadbeat" client.

**The First Pitfall: The Contract Is Signed, but You Didn't Leave a Paper Trail**

Many people sign contracts by simply sitting down for a drink, discussing the terms, signing on the spot, and then each party walks away with a copy. When a dispute arises later, you pull out the contract and take a look—well, the payment term says "payment upon delivery," but you shipped the goods three months ago, and the other party claims "the goods never arrived." You produce the delivery receipt, and they say "the signatory is not from our company." At times like this, no matter how well-drafted the contract terms are, they're useless, because you have no written record of the performance process.

Legally, this is called "absence of evidence of performance." If you sue in court, the judge only looks at evidence. If you say, "I called to demand payment," the judge asks, "Do you have a recording?" You say, "No," and the judge can only shake his head. So remember: all communication during contract performance must leave a trail via WeChat, email, or written correspondence. When sending a payment demand via WeChat, be sure to clearly state the other party's name, the amount, and the payment deadline, then take a screenshot and save it. If the amount is large, it's best to send a lawyer's letter or a written demand letter via EMS, write "Demand Letter" on the courier waybill, and keep the receipt.

The second pitfall: if the other company has no money, suing them means winning the case but getting no money.

This is the most painful pain point in contract disputes in Shenzhen. Many clients win their lawsuits, take the judgment to apply for compulsory enforcement, and the court checks—the opposing company's account balance is zero, there are no properties or vehicles under its name, and the legal representative was replaced long ago. You're so angry you stomp your feet, but the law is just this merciless.

Therefore, before signing a contract, you must conduct a "credit investigation." How? Go to the "National Enterprise Credit Information Publicity System" to check the other party's business registration information, litigation records, and list of abnormal operations. If the other party is a newly registered shell company, or frequently changes its legal representative, you need to be vigilant. In addition, the contract must include a "breach liability clause" stipulating the penalty ratio for overdue payment, and also a "jurisdiction clause" — stipulate that it be governed by the Shenzhen Bao'an District Court or the court in your locality. Don't stipulate it as the other party's locality, otherwise if you file a lawsuit, you'll have to travel to another place, and the costs will be frighteningly high.

**The third pitfall: You only have the contract in hand, with no account statements or settlement statements**

Once, a boss in the building materials business came to me, saying that the other party owed him 800,000 yuan for goods. He had the contract, delivery orders, and signed receipts, but the other party kept delaying payment. I asked him, "Did you have the other party stamp the reconciliation statement?" He shook his head. I said, "Then in your case, the opposing lawyer will deny the identity of the person who signed for the goods in court, claiming the goods were never received." He became anxious and asked, "Then what should I do?" I said, "You still have one chance—send a lawyer's letter right now, attach the reconciliation statement, and require the other party to confirm within 5 business days. If the other party replies or stamps it, that will be the most powerful evidence."

Legally, account statements and settlement statements are the core documents for "debt confirmation." If the other party refuses to confirm, you will have to rely on logistics receipt records, phone call recordings, and WeChat chat logs to "piece together" the evidence. However, these are all circumstantial evidence, leaving judges with significant discretion. Therefore, make it a habit: reconcile accounts with the other party every quarter and have them sign and stamp the "account statement." Even if the other party is reluctant, you should proactively send it over and keep records of the demand notices.

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**From a legal perspective, how should this be viewed?**

Under Article 509 of the Civil Code, both parties to a contract shall fully perform their respective obligations. If the other party fails to pay, this constitutes a breach of contract, and you are entitled to require it to bear liabilities such as continued performance and compensation for losses. However, from a practical perspective, when Shenzhen courts handle contract disputes, they place particular emphasis on a "closed loop of the evidence chain." Your evidence must form a complete chain of "contract → performance → demand for payment → confirmation." If one link is missing, the judge is likely to reject your claims in full.

For example, if you sue the other party for defaulting on payment for goods, you need to provide:
– Contract (certifying the rights and obligations of both parties)
- Delivery note/logistics document (proving that you have fulfilled your delivery obligations)
– Receipt record (proof that the other party received the goods)
– Collection records (proving that you have asserted your rights against the other party, thereby interrupting the statute of limitations)
Account statement/settlement statement (proving that the other party confirmed the amount of debt owed).

Among these, the first four items form the foundation, and the fifth is a bonus item. If the fifth item is missing, the judge may infer the amount owed based on "supply quantity + industry practice." However, if the opposing party raises an objection, you will need to supplement the evidence.

Practical advice: three steps, no pitfalls

First, send a "lawyer's letter." Don't send it yourself via WeChat—that lacks deterrence. Have the lawyer send the letter in the name of the law firm, specifying the amount owed, the breach of contract clauses, the risk of litigation, and a deadline of 3 days for a response. If the other party still fails to pay after receiving the letter, the letter itself will serve as evidence.

Second, apply for "pre-litigation property preservation." Before filing the lawsuit, first investigate the opposing company's bank accounts, real estate, and equity interests, and apply to the court for seizure and freezing. This step is the most critical—if the opposing party has money in their accounts, once the court freezes them, they will immediately come to you to negotiate. Many clients say, "I filed the lawsuit, but the opposing party transferred the money away," which means they did not carry out property preservation.

Third, conduct a "property trace investigation" when filing the lawsuit. Your attorney will help you look into the opposing party's affiliated companies in Shenzhen Bao'an District or elsewhere, as well as the shareholders' personal assets. If the opposing party is a family-run business, you may sue the shareholders for joint and several liability. Additionally, if the contract specifies a governing court, you should confirm whether it is unfavorable to you; if so, raise a jurisdiction objection and strive to have the case heard locally in Shenzhen.

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The Role of Professional Lawyers

Guangdong Zhiming Law Firm has been handling contract disputes for 26 years. The chief lawyer, Shen Jinlong, holds a master's degree in economics from Fudan University, worked as an economist for 31 years, and then as a lawyer for 22 years. His specialty lies in breaking down complex cases into two tracks: 'evidence chain + legal logic.' In one case he handled, an electronics factory in Bao'an District, Shenzhen, was owed 1.2 million yuan in payment by a client. The contract was poorly drafted, with no statement of account, and the client's lawyer denied receipt of goods in court. Lawyer Shen obtained three years of logistics delivery records from the other company and used WeChat chat records to confirm that the other party's financial personnel admitted to 'receiving the invoice.' Ultimately, the court ruled in full support of the payment and liquidated damages.

Attorney Li Yuming at the firm is an expert in construction engineering and creditor's rights/debts, having handled many construction payment disputes in Shenzhen. His experience is this: for construction contracts, you must settle payments in stages according to progress, and sign a "Construction Payment Confirmation" for each settlement. Never wait until completion to tally up the accounts—by then, if the other party's cash flow breaks, not even a deity could save you.

Also, many people ask about the "ranking of law firms for contract dispute cases in Shenzhen." In fact, rankings don't matter—what matters is how familiar the lawyer is with the local courts' trial standards. Zhiming Law Firm is located in Futian District, close to both the Shenzhen Intermediate People's Court and the Futian District Court, making it convenient for court appearances, file retrieval, and property preservation.

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**FAQ**

1. Can WeChat chat records be used as evidence?
Yes, but three conditions must be met: first, you must be able to verify the other party's identity; second, the content must be complete and unaltered; third, it must be directly relevant to the case. It's best to demonstrate the original device (the phone) in court, rather than just providing screenshots.

**2. If the other company has been deregistered, can you still sue it?**
You can sue the shareholders. If the other party cancels the company without going through liquidation, the shareholders shall bear joint and several liability. The prerequisite is that you need to obtain the internal business registration files to check whether the liquidation report is fraudulent.

**3. What is the statute of limitations?**
The general statute of limitations for contract disputes is three years, calculated from the date you become aware that your rights have been infringed. If you never demand payment and the limitation period expires, you will lose the case once the other party raises a defense. Therefore, it is essential to keep records of your debt collection demands.

**4. If I sue the other party, can I make them pay the attorney fees?**
If the contract stipulates that "the breaching party bears attorney fees," the court will support it. If not, you will have to bear the costs yourself. Therefore, be sure to include this clause when signing the contract.

5. Which court should generally be used to file a lawsuit for contract disputes in Shenzhen?
Check the contract terms. If there is no agreement, you can file a lawsuit in the court at the defendant's domicile (such as the Shenzhen Bao'an District Court) or the court at the place of contract performance. If the disputed amount under the contract exceeds 5 million, the case may need to be filed with an intermediate court.

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One last thing—contract disputes aren’t as simple as “going to court.” They’re a game of evidence and psychology. If you have evidence in hand, the other side will be afraid; if you hire a professional lawyer, the other side will back down. Don’t wait until the other party has skipped town to come crying to me.

Guangdong Zhiming Law Firm
Room 1802, Tower A, Xintian Century Business Center, Shisha North 2nd Street, Futian District, Shenzhen
Phone: 0755-25986969
(This article represents only personal opinions; for specific cases, please consult a professional lawyer.)