Things to note when signing a paper bag machine purchase contract: fully protect your rights and interests

In the paper bag production industry, equipment is the core of productivity. A paper bag machine with stable performance and outstanding efficiency directly determines product quality, delivery capabilities, and market competitiveness. However, as a significant fixed asset investment, the procurement process, especially the contract signing process, often carries hidden risks. A rigorous and comprehensive purchase contract is the most powerful legal weapon to protect the buyer's rights. This article will delve into the key points that must be paid close attention to when signing a paper bag machine purchase contract, helping you effectively mitigate risks during the procurement process and ensure investment security and maximized returns.

1. Contract subject review: confirm the reliability of the transaction object

• Qualification verification:  Be sure to ask the supplier to provide a valid business license, and focus on verifying whether their business scope includes the manufacture or sale of paper bag machinery. If special equipment is involved, the corresponding license must be checked.
• Contract fulfillment capability assessment:  Through on-site inspection of the supplier's factory size, production equipment, technical team, and past performance (especially sales record of similar paper bag machines), we evaluate their actual supply capabilities and technical strength. We also understand their market reputation and industry credibility.
• Authorization validity:  If the contracting party is an agent or distributor, it must be required to produce a clear, valid written authorization letter issued by the manufacturer, the original or a notarized copy, clearly stating the scope of authorization (model, region, and duration).

2. Equipment specifications and technical parameters: the core of the agreement must be extremely detailed

• Model and configuration lock:  Clearly state the specific model and version number of the paper bag machine. Detailed list of all standard configurations and optional accessories (such as special die-cutters, heat sealers, servo motor brands and models, control system versions, testing devices, etc.), accurate to the brand, specification, and quantity.
• Quantification of technical parameters:  The key performance indicators confirmed by both parties are clearly written into the contract in the form of quantified data:
  • Production speed:  clearly define the maximum stable production speed (unit: pieces/minute) for different bag types (such as flat-bottom bags, square-bottom bags, and handbags) and different paper weights.
  • Applicable paper range:  clearly define the paper weight range that can be processed (such as 70-250gsm), paper type (such as kraft paper, white cardboard, coated paper, PE-coated paper, etc.), and the maximum diameter and width of the roll paper.
  • Bag size range:  clearly define the length, width, and height (or bottom width) of the minimum and maximum bags that the machine can stably produce.
  • Processing accuracy requirements:  such as printing registration accuracy (±mm), die cutting/crease accuracy, heat sealing strength (N/15mm), cut flatness and other key quality indicators.
  • Energy consumption indicators:  main drive motor power, no-load power consumption, unit energy consumption under rated load (optional).
  • Specifications of key components:  such as main motor power and brand, PLC brand and model, human-machine interface brand, key pneumatic component brand, main bearing brand and specifications, etc.
• Process Capability Description:  Detailed description of the specific processes the machine can perform (e.g., automatic loading, web correction, printing (multi-color), die-cutting, creasing, bottom folding, gluing, heat sealing, cooling, counting, stacking, etc.). Special process requirements (e.g., stringing, window opening, or tear-off notch) must be separately listed and confirmed to be technically feasible.
• Acceptance standard basis:  Clearly stipulate the technical standards for equipment acceptance (such as industry standards, enterprise standards, and the "Technical Agreement" confirmed by both parties), and make the "Technical Agreement" an integral annex to the contract, signed and sealed by both parties.

3. Pricing, Payment, and Tax Terms: Clear and Transparent to Ensure Fund Security

• Total price breakdown:  Clearly list all costs, including the equipment price, shipping, insurance, installation and commissioning fees, training fees, taxes (specify the type and rate), spare parts, and special tools. Be wary of vague "package prices."
• Payment methods and nodes:  Design a reasonable payment rhythm with controllable risks:
  • Deposit/advance payment:  The ratio should not be too high (usually 10%-30%), and the payment terms should be clearly stated (e.g. within X days after the contract takes effect).
  • Progress payments:  If applicable (common for customized large-scale equipment), clearly state the basis for payment (such as completion of key component procurement and passing of equipment pre-delivery inspection).
  • Delivery payment/arrival payment:  A larger proportion (such as 40%-60%) is paid before the equipment is shipped or after it arrives at the buyer's factory designated location, which must be linked to the transfer of ownership of the goods or bill of lading.
  • Acceptance payment:  This payment is made after the equipment is installed and commissioned and passes final acceptance (e.g., 15%-25%). This is the most important payment and must be closely tied to the acceptance results.
  • Warranty deposit:  A certain percentage (usually 5%-10%) is reserved and paid after the warranty period expires without any quality issues.
• Payment vouchers and time:  clearly stipulate the seller's vouchers required for each payment (such as invoices, delivery documents, acceptance reports, etc. at the corresponding stage) and the buyer's specific payment time limit.
• Invoice type and time of provision:  clearly stipulate the invoice type (VAT special invoice or ordinary invoice) and the specific time point for providing the invoice (such as a number of working days before or after payment).

IV. Delivery, Transportation, and Risk Transfer: Clarifying Time and Space Nodes and Division of Responsibilities

• Delivery deadline:  Specify a specific delivery date or a fixed time period (e.g., "within 90 days of the effective date of the contract"). Agree on the calculation method for liquidated damages for late delivery (e.g., calculated on a daily basis, up to a maximum of X% of the total contract price) and the buyer's possible right to terminate the contract.
• Delivery location:  The specific workshop or warehouse location of the buyer's factory should be accurate (e.g., designated area within XX Factory, No. XX, XX Road, XX District, XX City). Avoid vague "designated location."
• Transportation Method and Responsibility:  Specify the transportation method (land/sea/air), the responsible party (international trade terms such as FOB/FCA/CIP/DAP or similar domestic agreements), and who will bear the freight and insurance costs. For large equipment, the party responsible for unloading and the equipment required must be clearly stated.
• Risk transfer point:  The key point in time when the risk of damage or loss of the goods transfers must be clearly stipulated (e.g., upon completion of unloading and receipt at the designated location of the buyer's factory). Cargo insurance should be purchased by the responsible party before risk transfer.

5. Installation, commissioning, training and acceptance: key links in equipment implementation

• Seller's responsibilities:  It is clearly stipulated that the seller must send qualified engineers to carry out free installation, commissioning and trial operation until the equipment reaches the technical performance and production capacity indicators agreed in the contract.
• Buyer's cooperation:  List the necessary conditions that the buyer needs to provide (such as qualified site, stable power supply (voltage, frequency, capacity), gas source (pressure, flow, dryness), water source, foundation, cooperation of operation/maintenance personnel, etc.).
• Training requirements:  Detailed provisions on training content (operation, daily maintenance, basic troubleshooting), training targets (operators, maintenance workers, technicians), training duration, location, language used, and provision of training materials (Chinese operation manual, maintenance manual).
• Acceptance process and standards:
  • Pre-acceptance:  Does it need to be carried out at the seller's factory? Pre-acceptance items, standards and signature validity.
  • Final acceptance:  This will be conducted after installation and commissioning are completed at the buyer's factory. The acceptance start time and duration (e.g., 72 hours of continuous stable operation or a certain number of qualified products produced), the standards (contract and technical agreement), test items, and acceptance criteria must be clearly defined.
  • Acceptance Report:  Agree on the format of the acceptance report, requiring both parties' representatives to sign and confirm as proof of acceptance. Specify the process for handling unsatisfactory acceptance (number of re-inspections, timeframe, and cost), and the consequences of re-inspection failure (return, contract termination, claims, etc.).

6. Quality assurance and after-sales service: guarantee of long-term stable operation

• Warranty period:  clearly define the starting point of the warranty period for the entire machine and key core components (such as the main motor, servo system, control system, main bearings, etc.) (usually 12-24 months from the date of final acceptance signature), as well as the warranty period for wearing parts (such as cutters, heat sealing cloths, rubber rollers) (usually shorter or agreed upon separately).
• Warranty Scope:  Clearly state that during the warranty period, the seller is responsible for free repair or replacement of parts due to defects in equipment design, manufacturing, or materials. Also clarify which situations are not covered by the warranty (e.g., improper operation by the buyer, maintenance not in accordance with the manual, natural disasters, or problems with consumables/accessories not provided by the seller).
• Response and Repair Time:  After a fault report is submitted, the seller's response timeframe (e.g., telephone/online support response within X hours), on-site arrival timeframe (e.g., domestically, within 48/72 hours), and fault repair timeframe (e.g., general faults resolved within X hours after arrival) must be agreed upon. For emergency outages, a shorter response time is required.
• After-sales network and spare parts:  Understand the seller's after-sales service network and inventory of commonly used spare parts in the buyer's location or nearby areas. It is best to require the seller to commit to the availability of spare parts in a specific area in the contract (for example, commonly used spare parts will be delivered within X hours).
• Technical support:  During and after the agreed warranty period, the seller shall provide channels and fee principles for technical consultation and software upgrades (if any).

VII. Intellectual Property and Confidentiality: Protecting Innovation and Trade Secrets

• Equipment ownership:  It is clearly stipulated that the ownership of the equipment belongs to the seller before the buyer pays the full amount (retention of title clause), and it is stipulated that the buyer may not mortgage or transfer the equipment before the full payment.
• Intellectual Property Ownership:  If the equipment contains patented technology, proprietary technology, or software copyright, clearly identify the ownership (usually to the seller). The buyer only obtains the right to use it.
• Confidentiality obligation:  Both parties agree to keep confidential the other party's business secrets (technical data, price information, customer information, etc.) learned during the performance of the contract. The confidentiality period is usually not less than several years after the expiration of the contract.

8. Liability for Breach of Contract and Dispute Resolution: Clarifying Consequences and Pathways

• Detailed breach of contract situations:  For common serious breach of contract behaviors (such as late delivery/acceptance by the seller, equipment failing to meet the agreed performance, late payment by the buyer, etc.), specific breach of contract liabilities are clarified.
• Liquidated Damages Calculation:  Agree on reasonable, practical, and deterrent methods for calculating liquidated damages for different types of breaches of contract (e.g., daily calculation of delay damages with an upper limit; proportional deduction of the purchase price for substandard performance, etc.). Avoid the general "assuming liability for breach of contract" approach.
• Triggering the right to terminate the contract:  Clarify under what circumstances is a fundamental breach of contract (e.g. the seller is more than X days late in delivery, the equipment still fails to pass acceptance after multiple commissioning, the seller goes bankrupt, etc.), the party in compliance has the right to unilaterally terminate the contract and claim damages.
• Scope of loss compensation:  clearly define the scope of loss compensation to be paid by the breaching party (including direct losses, indirect losses, such as loss due to work stoppage, loss of expected profits), or agree on the calculation method of loss compensation.
• Dispute Resolution Method:  Friendly negotiation is preferred. If negotiation fails, clearly stipulate whether to submit the dispute to arbitration by an arbitration commission in XX (specify the full name of the arbitration institution) or to file a lawsuit with the People's Court with jurisdiction in XX (usually the buyer's location, the place of delivery, or the place where the contract was signed). Arbitration is final and confidential.

9. Other important terms: details that cannot be ignored

• Environmental protection, safety, and compliance:  Specify that the equipment must comply with the buyer's local environmental regulations (such as noise and exhaust emission standards), production safety requirements, and relevant national/industry mandatory standards. Require the seller to provide necessary safety operating instructions and warning signs.
• Insurance:  Based on the risk transfer point and division of responsibilities, clarify the types of insurance that each party needs to purchase (such as cargo transportation insurance, all-risk installation project insurance, third-party liability insurance) and the responsible party.
• Validity of Contract Annexes:  All key supporting documents (such as technical agreements, configuration lists, drawings provided by the seller, and correspondence between the parties) must be clearly listed as annexes to the contract, and a statement must be made that the annexes have the same legal effect as the main body of the contract. Annexes must be signed and stamped by both parties.
• Contract Effectiveness and Number of Copies:  Specify the contract's effective conditions (e.g., effective upon signature and seal by both parties, or upon payment of a deposit by the buyer). Agree on the number of original copies of the contract and the ownership status of each party.
• Force majeure:  clearly defines the scope of force majeure events (usually including natural disasters, war, government bans, etc.), and stipulates the affected party's notification obligations, burden of proof, and the consequences of the event (partial or full exemption from liability, deferred performance, or termination of the contract).
• Applicable Law:  This contract is clearly governed by and interpreted in accordance with the laws of the People's Republic of China (or other designated laws).

10. Contract Signing and Dynamic Management: Starting with Contract Signing, but Beyond

• Sign carefully:  Ensure the final contract is the result of negotiation and confirmation by both parties. It must be signed by the legal representatives of both parties or their authorized agents and affixed with the company seal (or contract-specific seal). Check that all attachments are complete and validly signed.
• Contract Performance Tracking:  Contract signing isn't the end. The buyer should designate a dedicated person to oversee the entire contract process, closely monitoring key milestones (payment, delivery, installation and commissioning, acceptance, and warranty expiration). The buyer should promptly collect and preserve performance evidence (delivery notes, receipts, installation and commissioning records, acceptance reports, communication records, payment receipts, etc.). Upon identifying potential risks or signs of breach of contract by the other party, the buyer should promptly take action in accordance with the contract terms (e.g., issuing reminders or claims).
• Change Management:  If changes to the contract are necessary during implementation (e.g., configuration adjustments, delivery extensions), a written supplemental agreement must be signed to clearly define the changes and any potential costs and time adjustments. This supplemental agreement must be signed by authorized representatives of both parties to take effect. Verbal changes should be avoided.

A paper bag machine purchase contract is more than just a simple transaction voucher; it serves as a risk management blueprint that spans the entire lifecycle of the equipment and safeguards the buyer's core interests. In a competitive market and rapidly evolving technological landscape, a carefully drafted, comprehensive contract provides a solid legal shield. With equipment investments often costing hundreds of thousands, or even millions, prior signing requires thorough, professional review and negotiation, clear responsibilities, and addressing loopholes. Only then can the equipment be safely put into production upon arrival, truly achieving the strategic goal of reducing costs and increasing efficiency. Avoid temporary convenience or negligence that could create unforeseen risks for future production and operations. Prudent contracting is the wisest choice to safeguard your company's stable development.