UK sourcing company terms: what should I check?
Before accepting standard terms, confirm the company's role, the agreed work, excluded losses, how the liability cap is calculated and what cancellation would cost. Get changes recorded and seek legal advice where the remaining exposure could seriously affect your business. Discuss the order scope with Cambridge China Bridge.
Start with the complete contract
Request the standard terms and every document they refer to before approving the quote or paying. Check the contracting company's name, the terms' version and whether the quote, specification or standard terms takes priority if they conflict. Ask what action the provider treats as acceptance, and save the agreed documents together.
Confirm whether the company sells you goods or acts as your agent, using our agent or seller guide. Then put the actual work into the order: supplier checks, inspections, testing arrangements, reports and shipment approvals. Ask who answers for work delegated to factories, laboratories or freight providers.
Read exclusions against realistic failures
Mark clauses excluding defective goods, supplier failures, missed delivery dates, inspection errors or particular losses. Ask what happens if a batch needs sorting, replacement freight or customer refunds. Request a written explanation of which costs remain recoverable. Check whether a repair or replacement is described as your only remedy, and flag notice deadlines or evidence conditions your team could struggle to meet.
For contracts within its scope in England, Wales and Northern Ireland, the Unfair Contract Terms Act says liability for death or personal injury resulting from negligence cannot be excluded or restricted; exclusions for other negligence losses must satisfy reasonableness. Ask a solicitor about applicability rather than assuming every exclusion is ineffective. Our faulty-goods guide covers the separate rejection and claims process.
Work out what the liability cap leaves exposed
Identify the cap's calculation basis: service charges, the affected order's value or another defined amount. Check whether it applies per claim, per order or across the whole relationship, and whether connected claims share a cap. Compare it with the costs of a plausible failed batch. A cap tied only to sourcing charges may leave a substantial gap against the value of the goods.
Where the Act's reasonableness test applies to a monetary cap, available resources and the opportunity to obtain insurance are relevant considerations. Ask what insurance covers the agreed work and request evidence of its scope and exclusions. Do not treat an insurance limit as the contractual amount available to you. Flag any indemnity requiring you to reimburse the provider, especially if it sits outside your own cap.
Price the exit before placing the order
Ask for a cancellation schedule by production stage: before factory commitment, after materials are bought, during manufacture and after freight booking. Request the basis for retaining a deposit or charging additional costs, supporting records and credit for materials or goods that can be reused or sold. Clarify who receives paid-for tooling, unfinished goods and documents.
Separate cancellation for your convenience from ending the arrangement after a provider failure. Ask how prolonged delay, failed inspection and events described as outside the provider's control affect refunds, further payments and handover. Agree the notification route and who can approve an exit. Our order cancellation guide helps with the operational steps.
Know when to take the terms to a solicitor
Get advice before acceptance if the uncovered loss could threaten your business, the product has safety risks, tooling or designs are valuable, or the terms contain broad indemnities, unclear remedies or a dispute venue you cannot readily use. Ask for review of the governing law, dispute process, exclusions, cap and cancellation provisions together. Obtain advice specific to Scotland or an overseas arrangement rather than applying the negligence rules above unchanged.
Send the solicitor the terms, quote, specification, key promises and a realistic failure scenario. Ask which clauses need amendment and what exposure remains. Obtain the provider's written agreement to changes in the final contract documents. Keep commercial questions about sourcing scope with Cambridge China Bridge and legal questions about enforceability with your solicitor.
Frequently asked questions
Can a UK sourcing company limit its liability?
Terms may contain caps and exclusions. Check their scope and obtain advice on enforceability. For contracts within the Act's scope, exclusions for negligence losses other than death or personal injury must satisfy reasonableness.
What liability cap should I accept?
Compare the cap with a realistic failed-order loss, not just the sourcing charge. Check its calculation basis, shared limits, excluded costs and indemnities. Negotiate a cap your business can absorb.
Will I lose my deposit if I cancel?
Ask what the proposed terms say at each production stage. Request the cost basis, supporting records, credit for reusable materials and a written account of what you receive for any retained payment.
When should a solicitor review sourcing terms?
Before acceptance where uncovered losses could seriously affect your business, or where safety risks, valuable tooling, broad indemnities, unclear remedies or an unfamiliar dispute process are involved.