Understanding Transaction Risks in International Trade
In international trade, buyers usually do not make full payment before sellers ship the goods. This practice helps protect the buyer's transactional security. However, even with a lower percentage of advance payment, significant risks remain. Sellers may pressure buyers to pay additional amounts at the time of delivery. They might threaten to withhold the goods unless the price is increased, creating an unfair situation for the buyer.
When sellers demand more money or refuse delivery, buyers lose their dominant position in the transaction. They often find themselves in a difficult dilemma. One of our clients faced a similar challenge, and their experience sheds light on this issue.
A Real-Life Case: Cotton Incidents in Trade
In early 2024, a Brazilian company engaged in a transaction with a supplier in Shandong Jinan, China. They were purchasing a batch of copper scrap. After the Brazilian company made the advance payment, something unexpected happened. The Jinan company "suddenly" breached the contract. They demanded a price increase and threatened not to ship the goods unless the Brazilian company agreed to pay more.
Confronted with this unreasonable demand, the Brazilian company stood its ground. They firmly opposed the request and sought a refund for the advance payment. Initially, the supplier promised to refund the payment, but they returned only $500 to the Brazilian company. This partial refund was far from acceptable.
Seeking Legal Help: The Role of Attorney Larry Zhou
To protect their rights, the Brazilian company sought the assistance of Attorney Larry Zhou and his team at Landing (Shenzhen) Law Office. They needed a professional legal team to navigate the complexities of international trade and ensure their interests were safeguarded.
Upon receiving the commission, Attorney Larry Zhou and intern lawyer Laney Liu quickly analyzed the case materials. They thoroughly understood the facts and conducted a background investigation on the Jinan supplier. This investigation was crucial for building a strong case.
Formal Action: The Lawyer's Letter
After gathering the necessary information, Larry's legal team drafted a formal lawyer's letter. This letter demanded that the supplier fulfill their refund obligation. It served as a clear indication of the Brazilian company's intent to pursue the matter legally.
Once the letter was delivered and signed for, the team proactively communicated and negotiated with the supplier's general manager and salesperson. They insisted on the agreed refund to the Brazilian company.
Negotiation Tactics: The Power of Persistence
Negotiation can be a challenging process, especially in complex international trade scenarios. However, persistence often pays off. Through active coordination and continuous efforts, Larry's team maintained open lines of communication with the Jinan supplier.
The legal team emphasized the importance of adhering to the agreed terms. They worked strategically to show the supplier that fulfilling the refund obligation was not only the right thing to do but also in their best interest.
A Successful Outcome: Recovering Losses
After extensive negotiation efforts, the Jinan supplier eventually agreed to refund the majority of the payment. This resolution was a significant win for the Brazilian company. They were able to recover most of their losses, thanks to the diligent efforts of Attorney Larry Zhou and his team.
The Brazilian company expressed high recognition and appreciation for the professionalism, diligence, and dedicated service displayed by Larry's legal team throughout the case.
Conclusion: Lessons Learned in International Trade
This case illustrates the importance of understanding transactional risks in international trade. Buyers must be aware of the potential for sellers to make unreasonable demands. In such situations, seeking legal assistance can be crucial for protecting one's rights and interests.
By working with a knowledgeable legal team, businesses can navigate complex disputes effectively. It is essential to remain vigilant and proactive in maintaining fair practices in international transactions.
For more insights on handling trade disputes, consider exploring resources that offer guidance in this field. In challenging situations, having a robust legal support system can make all the difference.
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