Case Study: The "Brand-New" Promise and the $140,000 Used Machine Trap

A Bulgarian buyer paid nearly $140,000 for "new" machine modules from China and received used ones. How one WeChat sentence, a fast inspection and CISG Article 25 decided the case at China's Supreme People's Court. The Incident A Bulgarian company (the Buyer) ordered six sets of modules for a mask-making production line from a machinery maker in Taizhou, Zhejiang (the Seller). The price was nearly RMB 1,000,000 (approx. USD 140,000). The equipment was for producing sanitary and medical masks, and it was flown to Bulgaria. The trip took 11 days. On 16 June 2020, the day the crates reached the Buyer's factory, the Buyer wrote to the Seller and attached photos. They showed rust, scratches, worn parts and damaged cables on what was supposed to be new equipment. Two days later, on 18 June 2020, the Buyer had a local accredited (A-grade) inspection body test the modules. The report said the six modules had been used before delivery and could not be treated as new equipment. The Dispute: "New" Is Not "Brand-New" The Seller did not deny that the modules showed wear and corrosion. It argued about the words and about the journey: In its emails and chats it had only ever said the machines were "new", never "brand-new" (全新). It said these are different things, and that the Buyer was exaggerating what had been agreed. Assembling and testing a machine always leaves some light friction marks, it said, but a machine with such marks is still new and still works. The rust, it said, came from things it could not control: heavy rain while goods were unloaded or transferred, a forklift knock, or disinfectant spray. The Buyer's answer was plain. When you pay close to a million yuan, you expect machines that have not been used, whichever adjective was in the chat. It also pointed out that the goods went by air, in waterproof packaging, in 11 days, and that a little rain or disinfectant would not produce this level of rust. It said it had reported the problem the first moment it opened the crates, and that because the modules could not be used, they sat in its warehouse from then on, even though the pandemic was still severe in Bulgaria that year. The Court's Verdict: The Chat Said It, and the Evidence Backed It The case went through Zhejiang's High People's Court on appeal and then reached the Supreme People's Court, where the Seller applied for a retrial. On 13 December 2023 the Supreme Court rejected the application. The finding that the Seller had delivered goods that did not match the contract stood. In the court's reasoning: Which law applied. Both China and Bulgaria are parties to the UN Convention on Contracts for the International Sale of Goods (CISG), and the contract did not exclude it. So the CISG governed. The Buyer inspected fast enough. CISG Article 38(1) requires a buyer to examine the goods "within as short a period as is practicable in the circumstances". The Buyer raised the problem on the day of receipt with a large set of original photos, and had the lab report two days later. The court held that this met the standard. The Seller never disputed the damage itself. Its arguments, "we never said brand-new" and "it was weather and handling", did not deny what the report recorded. The court noted rust spots and corrosion, damaged power cables, scratches, worn conveyor belts and gears, corroded bolts, and scratches on the ultrasonic component body. The WeChat message decided the promise. In the conversation between the parties the Seller had written that what it was providing was brand-new equipment (我们提供的是全新的设备). The courts treated that as an obligation to deliver brand-new machines. What arrived was not new. Fundamental breach. Because of this, the Buyer could not achieve the purpose of the contract. That is a fundamental breach under CISG Article 25, and the contract could be declared avoided. The Truve Intelligence Takeaway This Buyer did several things right, and it still took until December 2023, more than three years after delivery, to get a final answer from China's top court. A court win is not the same as getting your money back, and three years is a long time to hold equipment you cannot use. Five habits would have made the case easier, or avoided the dispute: Treat chats as evidence. The Seller's sentence on WeChat carried real weight. Export and keep the conversation, and have important promises restated in an email or the contract. Put the condition in the contract, in both languages. Write "brand-new, unused, never operated except for factory acceptance testing" in English and Chinese. Do not leave "new" to be argued over. Inspect on arrival, fast. Photograph and film the opening of the crates, with dates. Book a qualified third party within days, as this Buyer did. This is what stopped the "it got wet in transit" story. Agree on packaging and transit risks up front. Say who bears the risk, how the goods are packed and how damage is to be shown, before the goods ship. Match the entity and the money. The legal name on the contract, the invoice and the bank account should be the same Chinese registered company, and you should know whether it makes the equipment or resells it. At Truve Verify, we say the same thing to every overseas buyer: a promise is only as strong as the company behind it and the paper that records it. A Truve Real Company check confirms who the Chinese legal entity is, and Real Capability tests whether it can actually make what it sells. Those checks do not replace a clear contract clause and an arrival inspection. Used together, they move the dispute from "what did you mean by new?" to a few lines in a contract that nobody can argue about. Source: Supreme People's Court of the PRC, civil ruling (2023) 最高法民申 2255号, dated 13 December 2023 (retrial application dismissed; appeal judgment: Zhejiang High People's Court, (2022) 浙民终 811号). Published on China Judgements Online (wenshu.court.gov.cn). Company and individual names are omitted. Amounts are converted at roughly RMB 7.1 = USD 1 and are approximate.