No Agreed Quality Standard: How a Chinese Court Applies CISG Article 35

Where an international sale contract says nothing about quality, CISG Article 35(2) decides whether the goods conform. The test is not the standard of the buyer's own country, and it is not necessarily the seller's. In a 2025 case published by the Supreme People's Court, a Chinese court held that the applicable measure is a reasonable quality standard: whether the goods meet what a buyer could reasonably expect, judged by the contract price and the parties' history of dealing. A Spanish buyer who assumed its national type-approval standard applied lost, and the judgment explains exactly why.

The facts: five years of trade, no written standard

Between March 2014 and October 2018 a Zhejiang company exported warning triangles to a Spanish company. The trade was worth more than US$1 million. The exporter's proforma invoices recorded model, quantity and unit price, but said nothing about the quality standard the goods had to meet — in particular, nothing about ECE Regulation No. 27, the type-approval standard for warning triangles in the buyer's market.

The parties traded again between 2018 and 2020, and again without any written quality standard. In May 2019 the Spanish buyer told the exporter that the specification used in the earlier dealings would continue to apply.

A dispute then arose over whether the goods met ECE R27. The buyer sued in the Changshan County People's Court, claiming US$248,000 in respect of the price paid, plus interest. The court dismissed the claim, and the judgment became final.

Why the Convention applied without being chosen

The contract contained no choice-of-law clause. Both parties had their places of business in contracting states of the Convention, so Article 1(1)(a) applied it automatically. That is worth pausing on: a Chinese exporter and a European buyer who never discuss governing law are, by default, inside the CISG — and the Convention's rules on conformity are not the same as those of either domestic system.

Three candidate standards, and the one the court chose

Article 35(2) requires goods to be fit for the purposes for which goods of the same description would ordinarily be used, fit for any particular purpose made known to the seller, possess the qualities of any sample held out by the seller, and be packaged in the usual manner. Chinese practice has developed three measures for the first of those limbs:

The court's reasoning on the third standard is the part to read closely. Reasonable quality is assessed by weighing the contract price and the long-term character of the relationship. On that approach, a seller is not obliged to know the marketing standards or mandatory standards of the buyer's country unless the contract says so, or unless both parties expressly or impliedly treated those standards as the specification.

Four reasons the buyer lost

1. No standard was ever agreed. Not in the proforma invoices, not in the 2018 to 2020 dealings, not in writing at any point.
2. ECE R27 was not a mandatory standard for this sale. The court treated it as a market-access requirement of the buyer's country, not as a term of the contract.
3. The goods had ordinary use value and could be resold. They could be sold on the open market to buyers in other countries or regions. The defect alleged was a failure to meet one national approval, not a failure to function.
4. The buyer had never complained before. Across several earlier shipments of the same product it raised no objection on quality. Conduct over five years shaped what "reasonable expectation" meant.

The May 2019 statement that the earlier specification would continue is the closest the buyer came to a contractual standard — and it referred back to a specification that had never been written down.

The clause the buyer needed: Article 35(2)(b)

Article 35(2)(b) makes goods conform only where they are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract. That is the door through which a regulatory requirement enters a contract. It stays shut if the purpose is never communicated.

A buyer who needs ECE R27 compliance does not need to argue about reasonable quality at all. It needs one sentence in the purchase order: the goods must be type-approved to ECE Regulation No. 27, evidence of approval to be supplied before shipment, and non-compliant goods to be rejected at the seller's cost. Once that sentence exists, the dispute is about a certificate, not about expectations.

Three clauses that would have decided it before shipment

• A specification annex, incorporated by reference. Product, model, dimensions, materials, performance figures, the test method for each, and the documents that must accompany each shipment. Annexed to the contract and signed, not described in an invoice.
• A purpose and regulatory clause. "The buyer has made known to the seller that the goods are intended for sale in [market] and must comply with [named standard]. The seller warrants compliance and shall indemnify the buyer against any loss arising from non-compliance." This converts Article 35(2)(b) from a defence into a warranty.
• A pre-shipment verification step. Third-party inspection against the annex, with the report a condition of payment. The cheapest place to find a conformity problem is the factory, not the port of discharge.

The inspection and document checks that belong at that stage are set out in the checklist to run before the first payment; the entity checks that establish whether the exporter can be held to a warranty at all are covered under due diligence on Chinese suppliers.

What this case does not decide

It does not hold that a Chinese seller can ignore foreign mandatory standards. Where goods cannot lawfully be sold in the destination market at all, the analysis moves: the buyer's purpose is frustrated, and Article 35(2)(b) or the general law on the contract may supply a remedy. Nor does it hold that silence about quality always favours the seller — a buyer with a documented course of dealing, samples approved by the seller, or marketing material describing the goods as compliant has evidence that the standard was impliedly made known.

What it does hold is narrower and more useful: in the absence of any of that, a national approval standard the buyer never mentioned is not part of the contract, and the seller is measured against what a reasonable buyer in that position could expect.

Frequently asked questions

If the buyer is in the EU and the goods need CE marking, is that automatically a contract term?

Not automatically. It becomes a term when it is agreed, or when the buyer can show it was made known and the seller accepted. In practice the difference between a buyer who wins and one who loses this argument is a purchase order that names the standard.

Does the Convention apply to every Chinese export contract?

Only where both parties are in contracting states and the Convention has not been excluded. China has declared under Article 95 that it is not bound by Article 1(1)(b), so the Convention is not pulled in merely because the applicable law is that of a contracting state. Many Chinese exporters now exclude the Convention by clause; a buyer should check before assuming it applies.

What is "reasonable time" to complain about quality under the Convention?

Article 39 requires notice within a reasonable time after the buyer knew or ought to have known of the lack of conformity, and in any event within two years of delivery unless that period is inconsistent with a contractual guarantee period. How Chinese courts have measured that period is set out in CISG Articles 38 and 39: the notice deadline buyers miss.

Can the buyer still claim if the goods are resaleable but only at a discount?

Yes, on a damages basis. Resaleability goes to whether the contract can be avoided; it does not extinguish the loss caused by the shortfall. The distinction is explained in the Guiding Case 107 analysis.

What to send me if quality is the dispute

Send the purchase order, the proforma invoice, the specification you say was agreed, the inspection report and the correspondence in which the requirement was raised. I will tell you which of the three standards a Chinese court is likely to apply to your file, whether Article 35(2)(b) is open to you, and what the claim is realistically worth after the cost of the procedure. The cost side is set out in what a Chinese supplier claim costs and what comes back.

About the author

Li Xinlei (Aaron Li) is a partner at Beijing Huicheng (Jinan) Law Firm in Jinan, Shandong, where he acts for foreign companies and individuals in international trade disputes, cross-border enforcement and construction claims. He has five years of international engineering and market development experience in the Middle East and South Asia, and writes on China trade lawyer practice from the buyer's side — what to check, what it costs, and what can actually be recovered.

Source note: this article summarises Case No. 10 in the Typical Cases on the Lawful and Equal Protection of the Rights and Interests of Private Enterprises and Entrepreneurs, released by the Supreme People's Court of the People's Republic of China on 31 July 2025. The parties are anonymised in the official publication, and no docket number was released; the case is therefore described by court and facts only. All factual details above follow the published text.

Disclaimer: This article provides general legal information and does not constitute legal advice for any specific case. Procedural rules and judicial practice change, and the appropriate route depends on the facts of the individual matter. Please consult and appoint a qualified lawyer for your own case.