Quick answer: If your Chinese supplier proposes using another factory, identify who will perform the work, what will move and which company remains responsible under your contract. Check approval rights before agreeing. Record the approved site, affected orders, inspection arrangements and control of drawings or tooling. A production change should not silently become a change of seller.
Scope: commercial sourcing involving mainland Chinese suppliers. The legal discussion below applies where the PRC Civil Code governs; international sales and manufacturing arrangements may require a different or additional analysis. Source checked: 3 November 2026.
First distinguish subcontracting from changing the contracting party
Several situations can look like a factory change: the seller hires a processor, moves work to another site it operates, buys finished goods from a third party, or asks a different company to replace it as seller. These arrangements raise different questions. Start with the Chinese legal name of your contractual counterparty and the proposed producer, their addresses and the work each will undertake.
Ask whether only a process such as coating will move, or whether the entire order will be produced elsewhere. Identify the batches and dates involved. A trading company may already source from external factories, so compare the proposal with the actual contract and earlier representations rather than assuming all third-party production was prohibited.
Does the original supplier remain responsible?
Under Civil Code Article 593, a party whose breach results from a third party’s conduct must bear liability to its counterparty according to law; its dispute with that third party is dealt with separately. A supplier’s explanation that “our subcontractor caused the problem” therefore does not, by itself, resolve the buyer’s contractual claim. Read Article 593 in the official Civil Code text.
This rule does not establish that every subcontract is prohibited, that a breach occurred, or that the buyer can automatically sue the factory directly. Review the relevant obligations, applicable law and legal relationship. If the proposal includes replacing the seller, releasing it from responsibility or changing the payment recipient, obtain a separate review before approving the documents.
A six-part approval checklist
| Question | Record to request | Decision to document |
|---|---|---|
| Who will manufacture? | Producer’s legal name, site address and role | Which entity and location are approved? |
| What work will move? | Process description and affected order or batch numbers | Is approval limited to one operation or shipment? |
| Will specifications change? | Current drawings, samples and proposed process differences | Which tests or sample approvals must be repeated? |
| Can quality be checked? | Proposed inspection access, timing and record availability | Who arranges access and addresses failed checks? |
| What information or assets will move? | List of drawings, software, molds and materials | What use, custody and onward-disclosure limits apply? |
| Who remains accountable? | Written description of the seller’s continuing obligations | Who handles defects, delay, records and corrective action? |
This is a commercial review tool, not a statutory approval form. Tailor it to the product and contract. A short packaging step and a transfer of safety-critical manufacturing should not receive identical review simply because both are described as outsourcing.
Write an approval process that operations can use
A useful contract explains what requires advance approval, what information the seller must supply and who may approve on the buyer’s behalf. It should distinguish a request from permission. Avoid relying on informal phrases such as “noted” when the parties need a clear decision about a new site.
Record whether consent applies only to named orders, whether further subcontracting needs approval and how changes must be reported. Agree workable lead times for review and escalation. The buyer’s engineer may assess a sample while procurement approves commercial terms; document those different responsibilities.
If the original agreement needs changing, use our supplier contract amendment checklist to keep the scope, effective date and supporting schedules consistent. Approval of a production site should expressly address any intended effect on price, delivery or existing claims.
Keep inspection, traceability and confidentiality connected
Before work moves, establish how inspectors will access the actual production site and which records will identify the relevant batch. Ask for a practical contact and escalation route. An inspection promise from the seller may be difficult to implement if the subcontractor has not agreed to admit inspectors or supply records.
Record the specification revision used at each site, sample identifiers and any agreed testing. Where product compliance documentation depends on the manufacturing process or location, have the relevant specialist assess whether it must be updated. A previously approved sample does not answer every question about a changed process.
Limit the drawings and commercial information shared to what the approved work requires, and agree who must implement confidentiality and restricted-use obligations. If molds or other buyer-funded assets will move, review custody, identification and return arrangements separately. See our guide to mold ownership and release disputes.
Example: an approved sample, an unreviewed production move
Hypothetical scenario: A buyer approves a sample made at Factory A. The seller later proposes moving coating to Factory B because of a capacity shortage. The purchasing team wants to preserve the shipment date, but quality control has not reviewed the new process.
A useful response identifies the batches, requests the proposed process and inspection arrangements, and records who will decide whether further testing is needed. It also confirms the seller’s obligations and whether the delivery date changes. An unconditional message saying “go ahead with everything” leaves these questions unresolved. This example illustrates a review workflow, not an outcome in a client matter.
What if production has already moved?
Preserve the original order, approved samples, communications and evidence of the new site’s involvement. Ask for a factual explanation: what moved, when, which units are affected and what has shipped. Separate confirmed facts from suspicions. Then compare the facts with the contract’s consent, quality and notice provisions.
Before refusing goods, withholding payment or terminating, obtain advice on the contractual and legal basis. A production change alone does not answer which remedy is available. If delay is also involved, our late-delivery and cancellation guide addresses that separate decision.
Frequently asked questions
Is subcontracting always forbidden without buyer consent?
Do not assume a universal rule. The answer depends on the contract type, agreed restrictions and applicable law. Read the production and consent provisions alongside the seller’s obligations.
Does a factory audit replace contractual protections?
No. An audit provides information within its scope and date. It does not itself settle who owes the buyer performance, whether another site may be used or what happens if goods fail agreed requirements.
What should I send for a focused review?
Prepare the signed contract, affected orders, supplier’s proposal, producer details, specifications and next operational deadline. Identify the decision you need: approve, request conditions, negotiate an amendment or assess an existing breach.
Review the production change before it becomes a dispute
JY Law Firm’s international trade contract services include drafting, review, negotiation support and dispute assessment. Contact the firm to discuss the review scope and a suitable channel for confidential documents. This article provides general information; advice depends on the agreement and facts.
