China NNN Agreement Lawyer: NNN and Manufacturing Contracts Your Factory Signs

A China NNN agreement is a non-disclosure, non-use and non-circumvention contract written to be enforced against a Chinese factory: the factory's registered Chinese company signs and seals it, PRC law governs it, and disputes go to the court where the factory sits. Most English NDAs miss that last part. They are governed by home-country law, point to a foreign court, and do little to stop a factory in China from making your product for someone else or selling it straight to your customers.

We draft the NNN in Chinese and English, both texts equally authentic, and we check the two versions against each other clause by clause before you send it. The price depends less on the product than on where you are in the process, so start with the four situations below.

Four starting points, four different jobs

Before anything leaves your hands

This is the cheapest moment to get it right. The NNN goes to the factory with your first request for quotation, and nothing technical follows until the sealed copy comes back. A factory that wants the order rarely refuses a reasonable NNN at this stage; one that refuses to sign anything is telling you something about how it will treat your drawings later.

The bilingual NNN alone is USD 1,500 with the first draft in 3 business days. If you upgrade to the Factory Starter Package within 90 days after delivery, the USD 1,500 is credited in full. If the product is final and you are about to order, the package, at USD 3,500, covers the NNN, the manufacturing framework agreement with a purchase order format, and mold and design ownership terms in one set.

After the drawings have gone out

Buyers often assume the moment has passed. It has not. Under the Civil Code, a party that learns a trade secret or other confidential information while negotiating a contract may not disclose or improperly use it, whether or not the contract is ever signed (Civil Code art. 501). An NNN signed now turns that general duty into specific obligations with a stated sum attached.

The document changes in one way. It carries a schedule of what the factory already holds: file names, revision numbers, the dates and channels used to send them, and the samples handed over. That schedule is what you will rely on if a dispute starts, because it removes the factory's easiest defense, that it never received the file. We send it with a covering email in both languages so the factory can see the request is routine. Fee: USD 1,500.

When you already have an NNN

A common pattern is a template downloaded online or drafted at home, in English only, governed by a foreign law. We do not write a review memo on it. We turn it into a final the factory can sign: bilingual, both texts equally authentic, with the Chinese party and court fixed, plus a short note explaining each change so you can answer the factory's questions yourself.

We read the text first and quote a fixed fee in writing before work starts. The fee does not move once agreed.

When the work goes beyond one factory

Many products are made by more than one company: a mold shop, a printer, a coating line, an assembly plant. Each one that sees your files needs to be bound, either by signing directly or through terms the main factory has to pass down. The section on subcontractors below explains how we handle that.

If you need the same NNN for a second or third factory, with only the factory details and the product schedule changed, the fee is USD 300 per factory, delivered in 2 business days with one round of revisions included.

What goes into the NNN

Non-disclosure covers the information. Non-use stops the factory from making your product, or something built from your drawings, for anyone else. Non-circumvention stops it from going around you to your customers, your other suppliers or your sales channels. An NNN that only does the first is an NDA with a different name.

We add the parts that decide whether the contract can be used. A defined list of protected information, with drawings, samples, molds, packaging artwork and customer details named. A stated sum payable on breach. An obligation to transfer to you any trademark, patent or design right the factory files on your product. A ban on listing your design on the factory's own channels, including marketplace stores run by related companies. And a clause on the cost of enforcing, discussed further down.

The duration matters more than buyers expect. We usually make the confidentiality and non-use duties last as long as the information stays confidential, and limit non-circumvention to a fixed period that a court would see as reasonable for the relationship.

Which Chinese company should sign the NNN?

The one that will actually hold your files, under its full registered Chinese name. An English trading name on a business card is not a party a Chinese court can find. We confirm the registered name and unified social credit code (the 18-character company registration number) against the National Enterprise Credit Information Publicity System, and the NNN is signed with the company seal, not only a signature.

If the factory sells through a trading company, which is common for export, both companies sign. The trading company has your contract and your payment; the factory has your drawings and your mold. An NNN binding only the trading company leaves the company that can copy your product outside the contract.

Subcontractors see more of your product than you think

Chinese contract law already expects a manufacturer to do the main work itself. A factory that hands the main work to a third party without your consent is answerable for that third party's work, and you may terminate (Civil Code art. 772). It may pass auxiliary work to others, but remains answerable for it (art. 773). The manufacturer must also keep your information confidential and may not keep copies or technical materials without your permission (art. 785).

Those rules help, but they do not tell you who the subcontractors are. Our NNN requires the factory to name, before production, every outside workshop that will receive drawings, molds or artwork, to obtain your written consent, and to have each one sign the same confidentiality terms. The factory stays liable for any leak through them. Common gaps are the mold maker, the printer that holds your packaging plates and the coating or plating shop that receives sample parts.

What the NNN has to cover depends on the product

The core clauses are the same in every NNN we draft. What changes is the list of things the factory will hold that it could use without you, and that list depends on what you make. These are the products we see most often.

Printed matter: books, packaging and labels

The printer keeps your print-ready files, the cutting dies and any foil or embossing blocks, and it always prints a few percent over the order to cover spoilage. Those extra sheets are where copies come from. We have the NNN list the files and dies as yours, and require the overrun to be counted, then delivered to you or destroyed with a written record.

Industrial parts made to your drawings

Here the drawing is the product. The usual risks are that the factory sells the same part to another buyer, or approaches your customer directly once it knows who the part is for. The NNN ties each drawing to its revision number, bars the factory from making the part for anyone else, treats the inspection gauges and fixtures you paid for as your property, and forbids a change of material or of outside heat-treatment and plating shops without your written approval.

Handbags and leather goods

A bag style lives in its paper patterns and in the hardware molds for buckles and logo plates. Once the patterns exist, nothing stops the factory from cutting the same style for another buyer unless the contract says so. Our NNN covers the patterns, the hardware molds and any logo-bearing hardware, labels or embossing plates, and requires surplus logo parts to be handed over or destroyed rather than left in the warehouse.

Furniture

Furniture factories sell through showrooms, catalogues and trade fairs, so a design you paid to develop can end up on display for other buyers. Beyond the drawings and CNC programs, the NNN forbids the factory from showing your design or samples in its showroom, catalogue, website or at a fair, and confirms that the samples belong to you.

If your product is not on this list, tell us what it is when you write, and we will build the list around it.

How do you make non-circumvention enforceable in China?

By making it specific. A clause that bans the factory from "competing" with you or "dealing with your customers" in general is easy for the factory to challenge and hard for a court to apply. A clause that names the protected product, refers to your drawings by number, lists the customers or channels you introduced, and sets a fixed period is much easier to enforce.

Three more things decide whether it holds. The stated sum must be in the contract, because otherwise you have to prove your loss. The dispute must go to a court or arbitration body the factory cannot avoid, which in practice usually means the court where the factory is located. And you must be able to prove the breach, so the contract obliges the factory to keep production records for your product and to show them on request.

Clauses factories push back on, and where we settle

Most export factories have seen an NNN before. A few points come back again and again.

The stated sum is the first. Factories cross out a large round number and propose a small one or none. We set the figure against your real exposure, such as the margin on a season's orders or the cost of retooling, and explain it in the covering note. We will come down if the figure is high for the order size. We do not agree to delete it.

Indefinite terms are the second. Some factories accept indefinite confidentiality but resist a non-circumvention period of more than a few years. We usually accept a shorter period for non-circumvention and keep confidentiality and non-use open-ended.

The third is the IP transfer clause. Factories worry that it reaches their own existing technology. We define your product and your drawings precisely and carve out the factory's own pre-existing processes, which usually settles it.

The fourth is the venue. A factory may ask for arbitration in a city far from its own location. If the factory is in Ningbo, the court in Ningbo can freeze its assets quickly; a distant venue adds a step. We hold to the factory's local court unless there is a reason to prefer arbitration, such as enforcement outside mainland China.

Liquidated damages and the cost of enforcing

Without a stated sum, you claim actual loss, and the law caps it at what the breaching party could foresee when it signed (Civil Code art. 584). Proving what a leak or a copy cost you is usually the hardest part of the claim. With a stated sum, the factory carries the burden of showing it is excessive. A court can reduce an amount it finds excessively higher than the loss, at the factory's request (art. 585), so a figure tied to your real exposure holds up better than a dramatic one.

Lawyers' fees are a separate point. In Chinese courts each side generally bears its own lawyers' fees unless the contract says otherwise. Our NNN makes the breaching party pay the costs of enforcement: lawyers' fees, court or arbitration fees, preservation fees and notarization costs. Where the contract provides for this, courts generally award fees that were reasonably incurred and actually paid. Keep the engagement letter, invoices and payment records; they are the evidence. This does not guarantee any result, but without the clause the question rarely gets that far.

What an NNN cannot do

It binds the companies that sign it, and no one else. A competitor who buys your finished product off a shelf and copies it has signed nothing. Neither has a factory in another province that sees your product on a marketplace. For those risks you need registered rights.

In China, the first is usually a trademark. China follows a first-to-file system, and a registered mark lets you act against copies sold or exported under your brand. Our China trademark service is USD 790 for one class, official fee included. Where the product's shape is what makes it valuable, a Chinese design patent may help; our firm's patent colleagues handle those filings and quote per case. Patents, designs and marks in your own sales markets are for local counsel there.

When do you not need an NNN?

When you have nothing to protect from the factory. If you are buying a standard product from the factory's own catalog, with only your logo added, an NNN adds little. A purchase contract with clear specifications and a trademark registration will do more for the money, and the Stock Purchase Contract is USD 1,200.

The same applies when anyone could copy the product from a retail sample in a week. An NNN with that factory will not stop strangers. We will say so when you ask, and suggest the trademark first. If what you are really worried about is the factory's honesty rather than its use of your designs, a supplier background check may be the better first step.

Two languages, one meaning

We write both the Chinese and the English text, state that they are equally authentic, and confirm in the contract that the parties have checked them against each other. Under the Civil Code, where a contract is made in two or more languages and the texts are agreed to be equally authentic, the words in each are presumed to have the same meaning; where they differ, the court interprets them by the contract's other terms, nature, purpose and good faith (Civil Code art. 466, para. 2).

We do not ask you to accept a Chinese text you cannot read as the one that prevails. The safety comes from the work we do before signing: numbers, dates, amounts, party names, defined terms and the dispute clause are checked line by line in both versions. If you specifically want the Chinese text to prevail, we will write it that way.

After the NNN: the manufacturing contract

The NNN protects your information. The manufacturing contract governs the orders. It deals with the points where buyer and factory usually fall out: approved samples as the quality standard, inspection and rejection, late delivery with a daily penalty and a right to cancel, final payment tied to the bill of lading, no lien over your tooling, and a rule that the factory's bank account can only change by sealed written notice confirmed by phone.

The factory also confirms that it knows the goods are resold on online marketplaces, which matters if you later claim lost profits. The manufacturing agreement with a purchase order format is USD 2,500, or USD 2,000 if you instruct us within 90 days after the NNN is delivered.

Buying finished stock instead

Not every buyer has a design or a mold. If you buy finished stock or standard models from a factory, a market stall or a 1688 seller, the contract you need is a sale of goods contract. It turns on different points: whether the seller is the maker, the approved sample and written specification, when and where you inspect and how long you have to raise a defect, deposit and balance, when risk passes under FOB or EXW, written proof of authorization for any third-party brand, and the same sealed-notice rule for bank account changes.

China and most major trading nations, including the US, Germany, Japan and Korea, are parties to the CISG (the UK is not). Where both businesses are in contracting states, it applies automatically unless the contract excludes it. Our contract states the position expressly.

Factory Starter Package

• Bilingual NNN agreement, both texts equally authentic
• Bilingual manufacturing framework agreement with purchase order form
• Mold and design ownership clauses
• Two rounds of revisions within 60 days after delivery
• First draft within 5 business days of receiving your payment confirmation and information

Fixed fee USD 3,500 for one factory and one product line, confirmed in writing before we start; each additional factory USD 300. Negotiating the contract with the factory on your behalf is quoted separately. If your factory exports through a trading company, the contract has to bind both companies and we will tell you how that changes the scope. A product development agreement, for a product you are still designing with the factory, is not included.

Stock Purchase Contract

• Bilingual purchase contract for finished or standard goods, both texts equally authentic
• Schedule of goods and quality standards
• Seller status, inspection, warranty and non-circumvention clauses
• Two rounds of revisions within 60 days after delivery
• First draft within 3 business days of receiving your payment confirmation and information

Fixed fee USD 1,200 for one supplier, confirmed in writing before we start. If you have your own design or tooling, the Factory Starter Package is the right one.

A round of revisions means one consolidated set of comments from you, including any comments from the factory that you pass on, sent together. Further rounds are quoted and agreed in writing before we do them. All fees are on the fees page.

Questions buyers ask about NNN agreements in China

Is an NNN agreement the same as a triple-net lease?

No. In real estate, NNN means a triple-net lease. In China sourcing it means non-disclosure, non-use and non-circumvention: the contract you sign with a factory before you send drawings, samples or customer details.

Will a Chinese factory sign an NNN under Chinese law?

Usually, yes. Factories that export regularly have seen one, and most argue over the stated sum rather than the form. A factory that refuses any NNN before seeing your files is worth a second look before you go further.

Does the NNN protect my design outside China?

No. It binds the factory in China and gives you a claim against it there. It does not register anything. A China trademark needs its own filing, USD 790 for one class, and patents or design rights in your sales markets are for lawyers licensed there.

Why do you answer in writing rather than by call?

So that every answer is on record. You can forward it to colleagues and to the factory, and nothing depends on notes from a conversation. Questions about the draft are answered by email.

Free self-check: Before you sign with a Chinese factory: a 12-question self-check. Tick yes, no or not sure and the page lists what is still open. Nothing you enter leaves your browser.

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