Chinese Buyer Refuses Delivery: Storage Costs and Resale Options for Foreign Sellers
A Chinese buyer stops arranging collection or refuses to receive a shipment, while warehouse charges keep increasing. A foreign seller should first establish whether delivery was properly tendered and why the buyer refused. The next decisions—preserving the goods, demanding payment, ending the contract and selling the goods—have different conditions. A missed collection date does not automatically permit disposal or recovery of every storage invoice.
1. Was the buyer required to take this delivery?
Check the contracting buyer, agreed delivery point and date, specifications, shipping documents, payment sequence and the party responsible for transport or import formalities. Keep evidence that conforming goods and required documents were available in the agreed manner. A collection request sent before the contractual delivery date is different from a refusal after a proper tender.
Under CISG Articles 53 and 60, taking delivery includes reasonably expected acts enabling the seller to deliver and taking over the goods. But a buyer’s refusal may rely on a contractual or legal remedy. Investigate a claimed serious defect, missing documents or a delivery that does not match the contract before describing the buyer as in default. Under PRC Civil Code Article 610, quality nonconformity that defeats the contract’s purpose can support rejection or termination; not every minor defect meets that test.
Identify the governing rules first. The CISG can apply to qualifying international sales between parties with places of business in different Contracting States unless effectively excluded. China retains its declaration concerning Article 1(1)(b); do not assume that every sale involving China falls under the Convention. A PRC-law clause alone should not be treated as automatically excluding it. Domestic-law rules below apply only where that law governs the issue. This guide concerns commercial goods transactions, not consumer returns.
2. Preserve the goods and document reasonable storage costs
CISG Article 85 applies where the buyer delays taking delivery—or fails to pay when payment and delivery are concurrent—and the seller possesses the goods or can otherwise control their disposition. The seller must take reasonable preservation measures and may retain the goods until reimbursed for reasonable preservation expenses. This is not a blanket right to hold any property for every debt.
Article 87 permits a party obliged to preserve goods to use a third-party warehouse at the other party’s expense, provided the expense is not unreasonable. Record why the warehouse, storage conditions and period were appropriate. Separate ordinary costs already included in the price from additional costs attributable to the dispute. A warehouse contract may still require the seller to pay the warehouse first; allocation between seller and buyer does not rewrite a third party’s contract.
Photograph condition and packaging, identify batches or serial numbers, obtain a signed inventory and keep temperature or maintenance records where relevant. If the goods are already under a carrier’s, warehouse operator’s or customs authority’s control, verify who can lawfully move or release them. Risk of accidental loss, ownership and custody obligations are separate questions; calling the buyer “in default” does not resolve all three.
3. Resale for preservation has specific conditions
Under CISG Article 88(1), a party bound to preserve goods under Article 85 or 86 may sell them by appropriate means when the other party unreasonably delays taking possession, taking them back, paying the price or paying preservation costs, provided reasonable notice of the intention to sell has been given. There is no universal seven-day waiting period. The goods, deterioration risk, communications and practical collection options matter.
Article 88(2) addresses goods liable to rapid deterioration or preservation involving unreasonable expense: the preserving party must take reasonable measures to sell them and, to the extent possible, notify the other party of its intention. Urgency should be supported by evidence, not merely asserted to justify a rushed low-price sale.
Article 88(3) permits retention from sale proceeds of reasonable preservation and sale expenses and requires accounting to the other party for the balance. It does not, by itself, authorize deducting every disputed invoice or keeping both the full original price and all resale proceeds. Assess other claims and any set-off separately. Also check title, third-party rights, customs restrictions and any court or arbitral orders; the CISG generally does not determine the sale contract’s effect on ownership.
| Decision | Evidence to keep | Limit to check |
|---|---|---|
| Demand collection | Contract, due date, delivery tender and buyer’s reply | Was refusal unjustified and was the seller ready to perform? |
| Maintain the goods | Inventory, condition records and necessary work | Reasonable preservation, with no avoidable deterioration |
| Use third-party storage | Quotes, warehouse terms, invoices and payment records | Reasonableness and separation of ordinary and additional costs |
| Notify intended resale | Notice, communication method, time allowed and urgency evidence | The applicable Article 88 conditions and practical ability to respond |
| Complete a lawful sale | Offers, valuation basis, purchaser, expenses and proceeds account | Appropriate means, third-party restrictions and accounting for the balance |
4. Keep payment, termination and disposal routes separate
CISG Article 62 permits demands for payment or taking delivery unless the seller has chosen an inconsistent remedy; court-ordered performance is also subject to Article 28. Article 63 allows a reasonable additional performance period. During that period the seller’s remedies are restricted unless the buyer states it will not perform within it, while delay damages remain available. Under Article 64, a fundamental breach or failure to pay or take delivery within a qualifying additional period can support a declaration of avoidance. Check notice requirements and Article 64(2)’s timing limits where the buyer has paid; contract termination is not automatic.
A preservation sale under Article 88 is analytically different from resale after avoidance used to calculate damages under Article 75. The latter requires an avoided contract and a substitute transaction made reasonably and within a reasonable time. Article 74’s causation and foreseeability rules and Article 77’s mitigation rule also matter. Reconcile resale proceeds, expenses, payments already received and claimed losses without counting the same loss twice.
Where PRC domestic law governs, Civil Code Article 589 allows recovery of increased expenses when the debtor performs as agreed but the creditor refuses receipt without a justified reason. Article 591 addresses reasonable mitigation and avoidable expanded losses. Articles 570–573 provide a separate statutory deposit route where their conditions are met: delivery to an appropriate deposit authority, not simply leaving goods at the seller’s chosen warehouse, establishes the deposit. Goods unsuitable for deposit or subject to excessive deposit costs may be lawfully auctioned or sold and the proceeds deposited. Verify the available procedure, restrictions and required notice before acting.
5. Build a collection notice and a reviewable claim file
A useful notice identifies the order and buyer, goods and present location, the contractual delivery basis, the buyer’s stated objection and the action requested. Set out a reasonable collection arrangement, current additional storage costs and proposed preservation measures. If resale is contemplated, give the appropriate separate notice and explain the basis; a general payment reminder may not communicate an intention to sell. Preserve the actual correspondence and evidence of transmission or receipt as relevant, without assuming all notice rules are identical.
For an initial assessment, prepare the contract and delivery terms, payment and invoice reconciliation, delivery-tender records, buyer’s objections, goods inventory, warehouse documents and a dated cost schedule. Flag perishable goods, an imminent storage deadline, a customs hold or a third-party claim at the outset. The correct forum and enforceable relief depend on the contract, transaction and buyer’s assets in China.
Related reading: legal options for a Chinese buyer’s payment default; risk transfer and transport damage; and quality deductions and set-off.
For a specific dispute, use the cross-border business service page or contact Jianxing Pan at panjianxing46@gmail.com. Start with a short transaction summary and the key deadlines. Depending on the evidence, the discussion may cover a collection notice, storage arrangement, negotiated exit, lawful disposal or a claim in China. Service scope and fees are confirmed before engagement; recovery is not guaranteed.
6. Sources, scope and image
Sources checked on 8 October 2026: CISG official text (including Articles 4, 28, 53, 60, 62–64, 74–75, 77 and 85–88); UNCITRAL status and declarations (in force for China from 1 January 1988); PRC Civil Code (effective 1 January 2021); Law on the Application of Laws to Foreign-Related Civil Relations, Article 41 (effective 1 April 2011); and SPC treaty and international-usage interpretation, Fa Shi [2023] No. 15 (effective 1 January 2024).
General information, not advice on a particular shipment. The cover is an AI-generated conceptual illustration of goods in storage, not a real client, case or shipment photograph.
Jianxing Pan, lawyer and partner at Beijing Chang’an Law Firm, working across Beijing and Shenzhen.
