A man in Shenzhen was dismissed from his job and recovered 260,000 yuan in compensation through arbitration, with just one piece of key evidence.

Last week, a client came to see me, surnamed Chen. He had worked at a company in the Science and Technology Park for over six years, earning a monthly salary of just over 30,000 yuan. He said the company suddenly asked him to leave, with the only reason given being "business restructuring." HR shoved a resignation form at him to sign, saying that if he signed, he would get 80,000 yuan in "humanitarian compensation." He almost signed on impulse, but luckily his wife stopped him with a reminder to "ask a lawyer first."

I looked through what was on his phone—just one thing: the employment contract he signed when he joined and a screenshot of the later transfer email. With just this one chain of evidence, the arbitration ruled that the company's termination was illegal and awarded him 260,000 in compensation. Today, no beating around the bush—using this case, I'll explain the most deceptive pitfalls in contract disputes.

One, the "mutual termination" agreement you signed might be a contract of servitude.

In Mr. Chen's case, what the company wants most is to get him to sign a "mutual agreement to terminate." Legally, the consequences are worlds apart: for a negotiated termination, the company only needs to pay N (years of service); for an unlawful termination, the company must pay 2N (compensation). With 6 years of service and a monthly salary of 30,000, N is 180,000, and 2N is 360,000. The company is trying to buy him off with 80,000, less than half of even N.

Many bosses count on employees not knowing the law and being afraid of trouble, using "background checks" or "bad reviews on your departure certificate" to scare you. But you should know that a departure certificate can only include the term of the labor contract, the date of termination, the job position, and your years of service at the company. If they dare add even one negative remark, you can turn around and sue them.

Practical suggestions:Any resignation document you're asked to sign, if it contains the phrases "mutual agreement," "personal reasons," or "no disputes whatsoever," do not sign it no matter what. Take a photo and have a lawyer look at it first—that one look could be worth hundreds of thousands.

2. Sales Contract: Goods Delivered but Payment Not Received—Do You Have These Documents on Hand?

In Shenzhen, eight out of ten business owners have encountered the nightmare of "cash on delivery turning into cash on disappearance." Last month, an electronics components supplier delivered 860,000 yuan worth of goods to a company in Longhua. After receiving the goods, the buyer stalled for 143 days, stopped answering calls, and blocked him on WeChat. When he came to me, all he had was a delivery receipt signed by someone listed only as "Mr. Zhang" — not even an ID number.

What makes this kind of case difficult?First, you cannot prove that "Zhang Sheng" is an employee of the other company; second, you cannot prove that the other party received the goods; third, you might even have written the other company's exact name incorrectly.

Legally, the core of a sales contract dispute comes down to three things: the existence of a contractual relationship, delivery of the goods, and the other party's failure to pay. These three things correspond to three sets of evidence.

Practical suggestions:

1. The delivery note must bear the other party's official company seal or contract-specific seal. The recipient must write their full name + ID number + mobile phone number, and it is best to attach an on-site photo of the recipient holding the goods.

2. Don't delete WeChat chat records. The Supreme People's Court has clearly stipulated that WeChat chat records are electronic data and can be used as evidence. But you need to ensure you can prove that the WeChat account belongs to the other company's boss or procurement person themselves.

3. Do a reconciliation statement once a quarter and have the other party's finance department stamp it for confirmation. This one piece of paper is more useful than a hundred WeChat messages.

III. Loan Disputes: What You Lend Out Is Affection, What You Get Back Is an Enemy

In the consultations that Shenzhen contract dispute lawyers handle daily, private lending accounts for about thirty percent. Relatives, friends, classmates, former colleagues—they beat their chests with promises when borrowing money, but play disappearing acts when it's time to repay.

A client in Bao'an lent 1.2 million yuan to a childhood friend. There was a transfer record, but the IOU only said "borrowed 1.2 million yuan today" — no interest, no repayment date, and no ID number of the borrower. After the friend ran off, he sued. The court did accept the case, but it took 4 months just to serve the summons — because they couldn't find the person. In the end, service by public announcement and a default judgment took another small half a year before he got the judgment. When it came to enforcement, it turned out the other party had nothing in his name.

Practical suggestions:

1. An IOU must clearly state: the borrower's ID number, the loan amount (in both numerals and words), the loan date, the repayment date, the interest rate (the annualized rate must not exceed 4 times the LPR), the penalty for breach of contract, and the agreed address for service of process.

2. In the transfer note, write "loan" rather than "payment for goods" or "current account transfer."

3. For large loans, have the other party provide a guarantor or collateral. An unsecured credit loan is essentially a lottery ticket.

IV. Equity Incentive Disputes: The "Options" You Think You Have May Just Be a Worthless Piece of Paper

This is a new type of case that Shenzhen contract dispute lawyers have frequently encountered in recent years. An executive at a company in Nanshan preparing for an IPO was given "stock options" when he joined, with a verbal promise that they were worth 5 million yuan. After four years, the company still had not gone public. When he resigned and tried to exercise his options, he discovered that the "Stock Option Grant Agreement" he had signed stated that "the company has the right to repurchase them at any time for 1 yuan."

The pitfalls in equity incentive disputes lie in:What you think is "equity" may legally be "phantom stock," "profit-sharing rights," "appreciation rights," or even a "bonus."Different natures, vastly different rights.

Practical suggestions:Before signing any equity incentive documents, have a lawyer carefully review three clauses—vesting conditions, repurchase price, and departure handling. The "departure handling" clause especially—many agreements hide traps like "termination upon departure" or "the company may repurchase unconditionally."

Five, why is it that when you are fired by a company in Shenzhen and look for a lawyer, you should find one who understands contracts?

Labor disputes and contract disputes follow two separate tracks in Shenzhen courts. But many cases overlap—for example, when a senior executive leaves, the matter involves not only labor compensation but also equity incentives, non-compete restrictions, and confidentiality agreements. A lawyer who only knows labor law may miss the landmines in the contract; a lawyer who only knows contracts may fail to calculate the labor compensation correctly.

Guangdong Zhiming Law Firm was established in 2000 and has been rooted in Futian for 26 years. Director Lawyer Shen Jinlong has 22 years of legal practice experience and 31 years of economist qualifications. A Fudan University Master of Economics graduate, he reviews contracts not only for legal clauses but also for business logic. Lawyer Li Wei has worked for many years in corporate law and economic contract disputes, and has handled many crossover cases involving labor disputes and equity disputes.

The core of the "Zhiming Artistic Litigation Law" theoretical system, originally created by Zhiming Law Firm, is just one thing:Polish the chain of evidence as if it were a work of art.In Mr. Chen's case, we didn't argue in the arbitration hearing about whether the "business adjustment" was genuine. Instead, we directly used the transfer email and the labor contract to prove that "the position has always existed, the adjustment was fake, and replacing the person was the real goal." The arbitrator understood immediately upon seeing this.

FAQ

Question: The company is asking me to sign a resignation agreement, saying they will only pay my wages if I sign it. Should I sign it or not?

Answer: Wages are wages, and compensation is compensation—these are two separate matters. The company cannot withhold your wages on the grounds that you "refuse to sign the agreement." If the agreement states that "both parties have no disputes of any kind," once you sign it, trying to arbitrate for wrongful termination afterward is basically hopeless. First get your wages, take a photo of the agreement and send it to a lawyer, and then decide whether to sign.

Q: If the counterparty company in a sales contract has been deregistered, can I still recover my payment for goods?

Answer: It depends. If the company is deregistered without liquidation, the shareholders must bear liability; if it is a one-person limited liability company, the shareholder must also bear liability if they cannot prove that their assets are independent from the company's. The key is to retrieve the pre-deregistration industrial and commercial internal files to see how the liquidation report was written.

Question: If the IOU does not specify a repayment date, within how long must a lawsuit be filed?

Answer: If no repayment date is specified, the statute of limitations starts from the day you first demand repayment and runs for three years. However, you need evidence of the demand—WeChat messages, text messages, emails, or a lawyer's letter all work. It is advisable to send a written demand every two years to restart the limitation period.

Q: The equity incentive agreement states "repurchase upon departure" — is there any way to salvage this?

A: Yes. If the repurchase price is significantly lower than the market price or the company's net asset value, you can claim unconscionability; if the company did not clearly inform you of the exercise conditions and repurchase terms, you can claim fraud or major misunderstanding. But it is quite difficult, and the key lies in the evidence.

Q: When looking for a contract dispute lawyer in Shenzhen, how can you tell whether they are reliable?

Answer: Don't just look at the size of the law firm. Ask them three questions: What's missing in the chain of evidence for my case? What defenses is the other side most likely to raise? If I lose, what are my fallback options? Only those who can answer these clearly and specifically are worth entrusting your case to.

One last thing: contracts are like this—when you sign them, you think they're a hassle; when something goes wrong, you think you don't have enough evidence. Mr. Chen's 260,000 yuan wasn't luck—it was his wife being extra cautious. If someone around you is being forced by their company to sign a resignation form, being strung along by a client on payment, or being dodged by a friend on a loan, forward this article to them. Guangdong Zhiming Law Firm, Room 1802, Tower A, Xintian Shiji Business Center, Shixia North 2nd Street, Futian District, Phone 0755-25986969.