Chinese Supplier Wants Final Payment Before Inspection: Can the Buyer Withhold It?

A Chinese supplier says the goods are ready and demands the final balance, but the foreign buyer has not been allowed to inspect them. Whether payment can be deferred depends on the agreed sequence, the law governing the sale and the evidence. An inspection request does not by itself cancel a payment deadline; equally, a supplier cannot simply disregard an agreed inspection condition.

This guide addresses business purchases of goods from mainland Chinese sellers. It separates payment before examination from a quality claim after delivery. Sources checked on 6 October 2026. 中文版本.

1. Read the payment trigger before deciding to withhold

Read the controlling contract, purchase order, amendments and inspection protocol together. “Balance before shipment” and “balance after a satisfactory pre-shipment inspection” create different questions. Identify whether the trigger requires an inspection opportunity, a specified report, approval of a defined batch, or merely a readiness notice. Check who may approve, what standards apply and how conflicting documents are resolved.

Do not treat “inspection” as an unlimited right to delay or insist on tests that were never agreed. Conversely, photographs selected by the seller may not satisfy a promised independent inspection. Record exactly what access was requested and offered, and whether the buyer arranged a qualified inspector within the available window. Our supplier-contract drafting guide addresses how to agree these milestones before a dispute.

2. Under the CISG, examination before payment has an express exception

First establish whether the United Nations Convention on Contracts for the International Sale of Goods (CISG) applies. Relevant matters include the parties’ places of business, the transaction and dates, contractual exclusions or variations, and State declarations. China’s entry into force was 1 January 1988; its declaration concerning Article 1(1)(b) must be considered. See the official status and declarations. A reference to Chinese law should not be assumed, without analysis, to settle the Convention’s application.

Article 58(3) generally gives the buyer an opportunity to examine before becoming bound to pay. But it expressly excepts agreed delivery or payment procedures inconsistent with that opportunity. An effective agreement to pay before examination therefore matters. Article 6 allows contractual exclusion or variation subject to its terms. In Chinese court proceedings, treaty-permitted exclusions are also addressed in Article 3 of the Supreme People’s Court interpretation, Fa Shi [2023] No. 15, effective 1 January 2024.

Article 58(1) also addresses payment when goods or documents controlling their disposition are placed at the buyer’s disposal, if payment is not due at another specific time. Article 59 addresses the agreed or determinable due date without requiring a seller’s demand. Read these provisions together: an opportunity to examine is not the same as an unconditional right to await resale, end-customer approval or months of use. Source: official CISG text, Articles 6, 58 and 59.

3. PRC domestic law requires a separate assessment of the sequence

Where PRC domestic sales law governs the issue, Civil Code Article 628 gives priority to the agreed payment time. If it remains undetermined after Article 510 is applied, payment is due upon receipt of the goods or documents for taking delivery. This is not a general statutory rule that every purchase balance is payable only after the buyer approves quality.

Articles 525 and 526 distinguish simultaneous obligations from obligations to be performed in sequence. If the seller was required to perform first and has not done so, the buyer’s defence must be assessed against that obligation; nonconforming performance may justify refusal of the corresponding performance. A missing inspection report matters differently if it is an agreed prerequisite to payment rather than a later administrative document. Withholding the entire balance for a limited issue requires separate justification.

The Civil Code took effect on 1 January 2021; check applicable transitional rules. The PRC Law on the Application of Laws to Foreign-Related Civil Relations, effective 1 April 2011, Article 41 addresses contractual choice of law and the rule without a choice. A Chinese supplier’s location alone does not make every domestic-law provision applicable.

4. If payment comes first, suspension needs its own grounds

Where advance payment is validly required, a different question is whether serious evidence justifies suspending performance. Under CISG Article 71, after contract conclusion it must become apparent that the other party will not perform a substantial part of its obligations because of a serious deficiency in ability or creditworthiness, or its conduct in preparing or performing the contract. The suspending party must immediately notify the other party and continue performance if adequate assurance is provided.

Under Civil Code Articles 527–528, a party required to perform first needs definite evidence of the specified threats to the other party’s performance, such as seriously deteriorating business conditions or transferring assets to evade debts. Suspension without definite evidence can itself attract breach liability. Timely notice is required, and performance must resume if appropriate security is provided. The subsequent conditions for termination must also be met; suspension is not automatic cancellation.

A slow reply, an unfavourable review online or refusal of an inspection method outside the agreement does not, by itself, establish these statutory conditions. Identify the particular evidence and contractual obligation before sending a suspension notice.

5. Build an inspection and payment evidence file

Issue	Evidence to preserve
Payment trigger	Controlling contract, agreed amendments, due date, amount and currency; inspection condition and approval authority.
Identified goods	Order, batch, quantity, location and production-readiness records linking the inspection to the goods being sold.
Actual opportunity	Inspection requests, proposed dates and method, access arrangements, seller replies and inspector attendance records.
Observed problem	Original photographs, sample identification, test method and measured result against the agreed specification; separate suspicion from confirmed facts.
Notice and assurance	Notice to the contracting seller through the agreed channel, delivery evidence, any assurance offered, and a dated record of the response.

Propose a practical inspection slot and a written payment arrangement while reserving the parties’ positions. An agreed extension, limited retention or alternative security may be discussed, but none becomes binding merely because one side suggests it. A reservation of rights does not create a defence that the contract and law do not provide.

6. Separate payment, quality remedies and the next legal step

After goods are delivered, examination and specific notice of defects remain separate obligations. Paying does not remove the need to preserve evidence, and withholding does not replace a timely quality notice. See inspection and defect-notice evidence. If defects are established, assess any proposed price deduction or set-off separately using the quality deduction and unpaid-invoice guide.

For a specific China procurement dispute, provide the seller’s registered Chinese name, the relevant payment and inspection clauses, outstanding amount and due date, goods location, access correspondence and any test results. Through our cross-border business legal service or consultation page, these materials can support discussion of a payment response, inspection arrangement, evidence preservation and the contract’s dispute procedure. Email: panjianxing46@gmail.com. Service scope and fees are to be agreed before engagement; no recovery or procedural timetable is promised.

General legal information, not advice on an individual transaction. Cover: AI-generated conceptual illustration, not an actual client, case or shipment photograph.

Jianxing Pan, Attorney · Partner, Beijing Chang’an Law Firm · Beijing/Shenzhen.