INDUSTRIAL POLYESTER CONTRACTS | 3 MIN READ

As a leading producer of industrial polyester yarn, globally, contracts with our customers are part of doing business at times – as is the case with many businesses. So, what should be considered when reviewing a contract or with a polyester yarn provider? This article provides a transparent list of contract elements that should be considered during a review.


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Most transactions in the industrial polyester market do not involve a traditional “contract” per se, although purchase orders and sales confirmations are technically “contracts”.  The vast majority of the market negotiates prices for particular products and then submits purchase orders with the agreed upon terms (price, payment terms, incoterms…).  This is very common when purchasing from traders, brokers or a wholly-owned distribution subsidiary of a manufacturer (ie. Hailide America or Hailide Fibers Europe). 

In these documents, customers normally include their standard terms and conditions, as do suppliers.  Fortunately, there are very few legal disputes, but they can arise.  Should a dispute come up, it is beneficial for both parties to have clearly documented “Standard Terms and Conditions”.  These are often so long that many do not read many of them, but they are necessary, and are something that should be reviewed.

RELATED: Selecting an Industrial Polyester Supplier on Customer Service

Standard Contract Elements for Industrial Polyester Agreements

industrial polyester yarn

For purchases directly from an overseas manufacturer where the customer clears customs, contracts are absolutely utilized, normally for each shipment and/or order.  These usually contain the following:

  • Product description and/or a specification
  • Price per lb. or kg and currency involved (Usually USD or Euro’s when dealing with Asia)
  • Timing of departure (sail date) and ETA
  • Payment Terms: for instance 30/70, Net 60 Bill of Lading Date:  Meaning 30% of the order is cash in advance and 70% is paid 60 days after receipt of the bill of lading.  This is just an example and can use many different combinations.
  • Port of loading and port of destination
  • Volume: +/- 10% normally.  Textile weights are not precise.  As a result, if one pallet is ordered, the net weight can vary from 1200 – 1300 net lbs.  This clause allows for some fluctuation.
  • Insurance: States which party pays for insurance (against damage, loss, theft….)
  • Bank name to make remittance.
  • Test standards: States under which test standards the Certificate of Analysis uses to report tenacity, denier, EB, Shrinkage….
  • Arbitration: States in what country/state legal disputes are settled.
  • Termination Clauses: Outlines under what circumstances either party may terminate the contract.
  • Language utilized for the contract: Normally English and the local Asian language will be used but normally states: “English shall prevail.”
  • Asian Company Stamp: Most Asian countries use official company stamps to certify that a document is original or legitimate.  Eastern companies do not understand why the US and Europe rarely (if ever) use company stamps.  This is not a deal killer.

There are many more versions and details, but these are the primary areas that contracts should cover.

Formal and Ongoing Contract Considerations

Some markets do enter into formal, ongoing contracts (ie. Not one-time purchases but for ongoing business) and they cover much of the same information. 

They are normally much more detailed and usually include NDA’s.  Ongoing contracts may also contain the following that are not normally included in one time deals:

  • Exchange rate adjustment: May be quarterly, bi annual or annual adjustments based on the USD/RMB exchange rate (or whatever local currency is used by the seller).
  • Raw Material adjustments: States which index to use and frequency of change.
  • Ocean freight adjustments: Normally changes monthly or quarterly depending on the volatility level in the market.

In either case, a professional lawyer should be consulted to make sure that the contract is binding, enforceable and fully covers your business from potential liability.

We hope that this article was helpful in assisting your contract review. Should you have further questions about elements in your agreement, reach out to Hailide, today.