[Direct answer]You can directly sue for unpaid debts without having to negotiate first. According to Article 579 of the Civil Code of the People's Republic of China (effective from January 1, 2021), if the buyer fails to pay the price, the seller may request payment from him/her; and the statute of limitations for debts is 3 years (Article 188). Regarding jurisdiction, you can choose the defendant's domicile according to Article 24 of the Civil Procedure Law, or select the court where the party receiving the money (i.e., the seller) is located according to relevant judicial interpretations. When suing, you should prepare the contract, the delivery note, the IOU, and the collection records, and apply for property preservation at the same time.

I. Legal basis and interpretation of provisions

1. Article 579 of the Civil Code (effective as of January 1, 2021)

This article is the core basis for claiming payment. The legislative purpose is to ensure the actual performance of monetary obligations. The constituting elements are: the existence of a valid contract or a de facto transaction relationship; the party has fulfilled its obligation to supply goods; and the payment deadline has passed but the debt has not been repaid. In terms of evidence, the seller should prove "how much has been delivered, how much has been paid, and how much is still owed". An exception is that if the payment condition is agreed to be subject to the acceptance of the goods, it is necessary to first prove that the condition has been satisfied.

2. Article 577 of the Civil Code (effective from January 1, 2021)

This article addresses the question of "what else can be claimed besides the principal": If a party fails to perform its contractual obligations or performs them in a manner inconsistent with the agreement, it shall bear such breach of contract liabilities as continuing performance, taking remedial measures, or compensating for losses. For payment obligations, the party may request continued performance. The losses caused by the overdue payment may also be claimed simultaneously. Typically, these losses are calculated based on the unpaid purchase price and the one-year LPR interest rate.

3. Articles 188 and 195 of the Civil Code (effective from January 1, 2021)

Article 188 stipulates that the statute of limitations is three years, calculated from the date when the right holder knows or should know that the rights have been infringed and the obligee has defaulted. The court will not provide protection for claims filed more than 20 years after the statute of limitations expires. Article 195 stipulates four circumstances that interrupt the statute of limitations: making a request for performance, the obligee agreeing to perform, initiating litigation or applying for arbitration, and other circumstances with equivalent effect. In loan disputes, statements of account, collection notices, and the other party's repayment plans can all interrupt the statute of limitations and restart the three-year calculation period.

4. Article 595 of the Civil Code (effective on January 1, 2021)

This article defines a sales contract: the seller transfers the ownership of the subject matter to the buyer, and the buyer pays the price. This determines the cause of action and the applicable law for disputes over payment. A common controversy is "whether a sales relationship can be established without a written contract". According to Article 469 of the same law, a contract can be concluded in writing, orally, or in other forms. Therefore, as long as the warehouse receipts and invoices can corroborate each other, the sales relationship can be deemed to have been established.

5. Practical guidelines for jurisdiction, preservation, and enforcement

According to Article 24 of the Civil Procedure Law, disputes over sales contracts are subject to the jurisdiction of the court at the defendant's domicile or the place of performance of the contract; where the subject of the dispute is the payment of money, the relevant judicial interpretations specify that the place where the party receiving the money is located is the place of performance of the contract, and the seller can usually sue locally. After winning the lawsuit, the seller can apply for enforcement within two years; if no property is found during the investigation, the seller can verify the shareholders' contributions and pursue legal accountability according to law.

II. Henglue Law Firm's Real Cases (Detailed Review)

Review of the case:The plaintiff, An * , is engaged in the liquor business. The defendant, Zhou * , has been purchasing liquor from him since January 2018, with a total of 124 boxes and a total payment of 204,540 yuan as of November 13, 2018. Zhou * has not paid the full amount yet. After An * repeatedly demanded repayment, Zhou * returned 100,000 yuan worth of liquor and paid 5,000 yuan. In December 2021, Zhou * issued a promissory note confirming that he still owed 100,000 yuan and promised to repay the amount before December 31, 2022. However, the payment was not made on time. An * has entrusted a lawyer to handle the case on his behalf.Henglue Law FirmProsecute.

The focus of the controversy:First, whether a sales relationship has been established—can the warehouse receipt and IOU prove the transaction facts in the absence of a written contract? Second, how should the amount of the debt be determined? Third, what is the base and standard for calculating the overdue losses?

Our position and the other party's position are as follows:An * claimed that Zhou * still owed him 100,000 yuan in unpaid goods, and submitted a "Debt Note and Repayment Plan" and a warehouse release note, demanding payment of the goods and compensation for the overdue losses. Zhou * failed to appear in court after being legally summoned, and the case was tried in absentia.

Attorney's Strategy:After accepting the commission, Attorney Chen Mei'ao and her team immediately began to represent the client, sort out the case facts and fix the evidence. Firstly, according to the provisions of the Civil Code on the form of contracts, the absence of a written contract does not preclude the establishment of a sales relationship; Secondly, the six out-of-stock lists stating the date, product name, quantity, unit price, and amount, together with the "Note of Debt Repayment Plan", corroborate each other, proving that the parties have established a sales relationship and the amount of the debt has been confirmed by the defendant; Thirdly, in accordance with Article 577 of the Civil Code, the plaintiff claims that the defendant should bear breach of contract liabilities such as continuing to perform the contract and compensating for losses.

The court's reasoning and the outcome of the case:The court adopted our opinion, confirmed that a sales relationship had been established between the two parties, and ruled that Zhou * should pay An * the purchase price of 100,000 yuan and the damages for late payment within seven days. The damages would be calculated based on the amount of 100,000 yuan and the one-year LPR interest rate from December 31, 2022 to the date of actual payment. The announcement fee and acceptance fee shall be borne by Zhou *. The significance of this case is that the absence of a written contract does not mean there is no solution. The key lies in whether the documentary evidence can form a coherent chain of evidence.

This case is handled by Beijing Henglu Law Firm.Chen Mei'aoAttorney (practice certificate number: 11101201911105336, subject to the certificate issued by the judicial administrative organ) acting on behalf of the client. For similar cases, please refer toCase Library.

III. Frequently Asked Questions

Q1: If there is no written contract, only the outgoing inventory list and the IOU, can I win the lawsuit?

Yes, there's a high likelihood of winning in practice. According to Article 469 of the Civil Code, contracts can be concluded in writing, orally, or in other forms. The absence of a written contract does not affect the establishment of the sales relationship. In this case, there was no written contract, but the court relied on six outgoing invoices that specified the date, product name, quantity, unit price, and total amount, as well as the defendant's "Note of Debt Repayment Plan". At the same time, the court confirmed the transaction facts and the amount of the debt. The key points of evidence are that the outgoing invoices should be signed and stamped by the other party as much as possible, and regular reconciliations and written confirmations of the debt from the other party should be conducted.

Q2: Where can I file a lawsuit for a payment dispute? Can I sue at the local court of the seller?

Generally, this is possible. According to Article 24 of the Civil Procedure Law, disputes over sales contracts are under the jurisdiction of the court at the defendant's domicile or the place of performance of the contract; where the subject matter of the dispute is the payment of money, the relevant judicial interpretations specify that the place where the party receiving the money is located is the place of performance of the contract. Recovering the payment of the goods is precisely a lawsuit for the payment of money, and the seller can sue in the court at his own domicile, thereby saving the time and cost of litigation in other places. The exception is that if the contract has stipulated the jurisdiction court in writing, the court stipulated in the contract shall apply; if the other party raises a jurisdiction objection, he shall provide evidence to prove that the local court has jurisdiction.

Q3: If the payment has been delayed for a long time, can I still sue them after more than three years?

It is still possible to sue, and the court will not refuse to register the case because of the statute of limitations. However, once the other party raises the statute of limitations defense, the risk of winning the lawsuit will increase significantly. According to Article 188 of the Civil Code, the statute of limitations is 3 years, with the maximum protection period of 20 years. The key lies in the interruption of the statute of limitations in Article 195: if the creditor requests performance, the debtor agrees to perform, or the creditor initiates a lawsuit or applies for arbitration, the statute of limitations will be interrupted and recalculated. In this case, Zhou * issued a promissory note in December 2021, and the statute of limitations had not expired when he sued in 2022.

Q4: Should I apply for property preservation when suing? How long will it take to get the money?

It is recommended to apply for preservation measures, especially when the other party has a history of default or there are signs of transferring assets. According to the provisions on preservation measures in the Civil Procedure Law, you can apply to freeze the other party's account and seize their real estate either simultaneously with the lawsuit or before filing the lawsuit, to prevent the other party from having no assets to enforce after winning the case. The time of recovering the payment depends on the effectiveness of the preservation measures and the other party's willingness to perform their obligations: if the account is frozen and the balance is sufficient, many cases can be settled through negotiation before or after the judgment takes effect; if the other party really has no assets, you need to proceed with the compulsory enforcement procedure separately.

Q5: If the other party does not appear in court, how will the court rule on the case?

If the defendant refuses to appear in court without a valid reason after being legally summoned, the court may hold a trial in absentia and make a judgment. In this case, the defendant, Zhou * , failed to appear in court to defend himself. After reviewing our evidence, the court confirmed the existence of the sales contract and ordered him to pay the purchase price of 100,000 yuan and the overdue damages within seven days. There are two prerequisites for holding a trial in absentia: first, the service must be legal; second, the evidence must still meet the standard of proof. Documents without the other party's signature and reconciliation statements with conflicting amounts may still be rejected as claims.

IV. Suggestions for Protecting Rights

  • All transactions are tracked throughout the entire process:Sign a written contract and specify the payment time and the standard of the breach of contract penalty; require the other party to sign and stamp the delivery documents and keep the original of the out-of-warehouse list.
  • Turn the verbal debt into a written claim:If you find that the other party is delaying payment, guide them to issue a promissory note or a repayment plan as soon as possible. The note or plan should specify the amount and the repayment date, and be signed by both parties. This will not only fix the amount but also interrupt the statute of limitations.
  • The collection agent must keep the delivery receipt:The collection letters and attorney's letters are delivered and stored with proof in a traceable manner, which constitutes evidence of the interruption of the statute of limitations.
  • The prosecution and preservation of evidence proceed simultaneously:For cases involving large sums of money or where there are signs of the other party transferring assets, a preservation application should be submitted together with the case when it is filed, and if necessary, the shareholders' liability should be added.
  • Don't miss the statute of limitations for enforcement:After the judgment takes effect, if the other party still fails to perform its obligations, it shall apply for compulsory enforcement within the statutory time limit.

The recovery of overdue payments is both a legal battle and a race against time. The earlier you fix the evidence and initiate the legal process, the greater the initiative in recovering the money. Henglue Law Firm has handled 60 cases involving creditor-debtor disputes. If you are currently facing overdue payments, it is recommended that you consult a professional lawyer as soon as possible, bringing along the contract, the delivery note, and the IOU. →Legal services for corporate commercial and contract disputes·Attorney Chen Mei'e·Beijing Henglu Law Firm