I was sitting in a mediation room in Shanghai two years ago. A buyer from the UK and a supplier from Jiangsu were across from each other. The buyer had signed a standard purchase order—one page, no details. The fabric arrived with 8% shrinkage. The buyer’s spec was 3%. The supplier said, “You didn’t tell us 3%. The contract says nothing about shrinkage.” The buyer lost £30,000. He looked at me and said, “I thought it was understood.”
I’ve seen this happen too many times. A buyer signs a contract that’s missing critical details. Then something goes wrong, and there’s nothing in writing to protect them. The supplier isn’t necessarily dishonest. They’re working to the contract they signed. If the contract doesn’t say it, they didn’t agree to it.
Over 20 years, I’ve reviewed hundreds of fabric contracts. I’ve seen the good, the bad, and the disastrous. I’ve learned exactly what questions you need to ask before you sign. This isn’t about being suspicious. It’s about being clear. A good contract protects both sides. It makes the relationship work.
Let me walk you through the key questions. I’ll tell you what to ask, why it matters, and what the answers should look like.
What Specifications Must Be in the Contract?
The first set of questions is about the fabric itself. If the specs aren’t in the contract, they don’t exist. I’ve seen buyers assume things that were never written down. Don’t let that be you.
How Should Fiber Content and Weight Be Documented?
This seems basic. But I’ve seen contracts that say “cotton fabric” with no percentage, no yarn count, no weight. That’s not a spec. That’s a starting point for argument.
Ask: “What is the exact fiber content, including percentages?”
The answer should be specific. “100% combed cotton” or “80% cotton, 20% recycled polyester.” Not “cotton blend.” If you’re specifying a particular yarn—like 40/1 combed ring-spun—that should be in the contract.
Ask: “What is the finished fabric weight, and what is the tolerance?”
Weight should be in GSM or ounces per square yard. And there should be a tolerance. We use +/- 5% on GSM. If the contract doesn’t specify tolerance, the supplier can deliver fabric that’s 10% lighter and claim it’s within “normal variation.”
In 2023, a client from the US signed a contract for “cotton twill, 8 oz.” The fabric arrived at 7.2 oz. The supplier said, “8 oz is approximate.” The client had no tolerance in the contract. He paid the full price for lighter fabric.
If you’re sourcing custom fabric, ask about yarn count and weave structure. A poplin is different from a twill. A 50/1 yarn is different from a 30/1. Put it in writing.
What Quality Standards Should Be Specified?
This is where most contracts fail. The buyer assumes the fabric will meet certain standards. The supplier assumes the buyer will accept what they ship. The gap is where problems live.
Ask: “What are the shrinkage tolerances?”
This should be specific. “Maximum 3% shrinkage in length, 2% in width after three home washes.” If it’s not in the contract, the supplier can ship fabric that shrinks 8% and say “cotton shrinks.”
Ask: “What are the colorfastness requirements?”
Specify the test method and the standard. “Colorfastness to washing: AATCC 61, minimum grade 4.” Or “colorfastness to light: AATCC 16, 40 hours, minimum grade 4.” If you don’t specify, the supplier might use a cheaper dye that fades quickly.
Ask: “What is the acceptable defect rate?”
This is the one buyers forget. No fabric is perfect. But you need to agree on what’s acceptable. “Maximum 5 defects per 100 linear meters, with no defect larger than 2cm.” If it’s not in the contract, the supplier can ship fabric with defects and say “this is normal.”
In 2024, a client from Canada added a defect tolerance to his contract for the first time. The fabric arrived with 12 defects per 100 meters. He rejected it. The supplier had to replace it. He told me, “I’ve been buying for ten years and never put that in a contract. I’ll never make that mistake again.”
For a guide to fabric quality standards, there’s a resource on ASTM and AATCC standards for textile quality . It covers the tests you should specify.
What Delivery and Timeline Protections Should You Include?
The second set of questions is about when you get your fabric. I’ve seen buyers miss their production windows because the contract had no delivery guarantees. Don’t let that happen.
How Should Delivery Dates Be Stated?
Vague delivery dates are a trap. “Ship in 30 days” from when? From contract signing? From sample approval? From payment?
Ask: “What is the specific ship date, and what are the milestones?”
The contract should have a clear ship date. And it should have milestones: “Sample approval by [date]. Production start by [date]. Ship by [date].” This gives you visibility and recourse if things slip.
Ask: “What happens if the supplier misses the ship date?”
This is the penalty clause. It should be specific. “If shipment is delayed beyond the agreed date, supplier pays a penalty of 1% of order value per week, up to 5%.” Or “buyer may cancel order and receive full refund if shipment is delayed by more than 14 days.”
In 2023, a client from Australia had a contract with no penalty clause. The supplier missed the ship date by six weeks. The client missed his production window and had to air freight the fabric. He told me, “I spent $8,000 on air freight that I should have been able to recover from the supplier. But I had no contract protection.”
If a supplier pushes back on a penalty clause, that’s a red flag. A reliable supplier knows they can meet their dates and isn’t afraid to commit.
What Should the Contract Say About Sampling and Approval?
The sampling process is where many disputes start. The contract needs to be clear about what’s approved and what’s not.
Ask: “What samples will be provided, and what is the approval process?”
The contract should specify:
- Lab dips. How many rounds? What’s the timeline?
- Strike-offs. For woven patterns, when will they be provided?
- Production sample. Will a sample from the production run be provided before shipment?
Ask: “What happens if the sample is not approved?”
If the sample doesn’t match, you need to know your options. “If the supplier fails to produce an approved sample after three rounds, buyer may cancel the order with full refund.”
In 2024, a client from the UK had a contract that said “sample approval required.” But it didn’t say what happened if the sample wasn’t approved. The supplier sent four rounds of samples. None matched. The client couldn’t cancel because the contract didn’t give him that right. He ended up accepting a fabric that was close but not exact.
If you’re ordering custom fabric, make sure the sampling process is in the contract. It protects both sides.
What Payment Terms and Dispute Resolution Should You Agree On?
The third set of questions is about money and what happens if things go wrong. This is the part buyers often skim. Don’t. This is where you protect your cash.
How Should Payment Terms Be Structured?
Payment terms are negotiable. But they should be clear.
Ask: “What is the deposit, and when is the balance due?”
Standard terms are 30% deposit to start production, 70% balance before shipment. For new relationships, this is reasonable. For established relationships, you might negotiate 30% deposit, 70% against copy of bill of lading (so you pay after shipment).
Ask: “What happens if the fabric fails inspection?”
This is critical. The contract should say: “Fabric that fails agreed quality standards may be rejected. Supplier must replace rejected fabric at their cost within [X] days, or refund the deposit for rejected quantities.”
In 2023, a client from the US had a contract that said “final payment before shipment.” The fabric arrived and failed inspection. He had already paid in full. He had no leverage. The supplier took months to resolve the issue.
If you can, negotiate to hold back some payment until you’ve inspected the fabric. Even 10% held until after inspection gives you leverage.
What Dispute Resolution Process Should Be in the Contract?
This is the part no one wants to think about. But if there’s a dispute, you need to know how it will be resolved.
Ask: “What law governs this contract?”
If you’re buying from China, the contract should specify Chinese law or a neutral jurisdiction. If it’s silent, the law of the supplier’s location applies.
Ask: “What is the dispute resolution method?”
Options include:
- Mediation. Non-binding, faster.
- Arbitration. Binding, faster than court.
- Court litigation. Slower, more expensive.
I recommend arbitration. The China International Economic and Trade Arbitration Commission (CIETAC) handles textile disputes regularly. It’s recognized internationally.
Ask: “Where will disputes be resolved?”
If you’re a US buyer, you don’t want to litigate in a small Chinese city court. Specify arbitration in Shanghai or Beijing, or in your home country if the supplier agrees.
In 2024, a client from Germany had a contract with no dispute resolution clause. When a dispute arose, the supplier insisted on local court in their small city. The client had no choice. He told me, “I spent more on the lawyer than the fabric cost.”
If you’re signing a contract, ask about dispute resolution. A supplier who is serious about the relationship will agree to fair terms.
What Hidden Costs and Contingencies Should You Address?
The fourth set of questions is about costs that aren’t in the price per meter. These add up fast. I’ve seen buyers surprised by costs they assumed were included.
What Costs Are Included in the Price?
Ask: “Is this price FOB or EXW?”
EXW means you’re responsible for all costs from the factory. FOB means the supplier handles inland freight and export clearance. The difference can be $0.30 to $0.50 per meter.
Ask: “Does the price include testing?”
Some suppliers quote a low price and charge extra for test reports. If you need testing, make sure it’s included or the cost is specified.
Ask: “What is the surcharge for small batches?”
If you’re ordering less than the standard minimum, there may be a surcharge. Get it in writing.
In 2023, a client from Canada received a quote for $4.50 per meter FOB. She placed the order. The supplier then added $0.40 per meter for “inland freight” and $0.20 per meter for “documentation.” The quote had said FOB, but the contract didn’t specify what was included. She paid.
If you’re reviewing a contract, ask for a complete breakdown of costs. If it’s not in the contract, it’s not agreed.
What Contingencies Should Be Covered?
Things happen. Yarn prices spike. Factories have power outages. The contract should say who bears the risk.
Ask: “What happens if raw material prices increase?”
Some contracts allow the supplier to pass on increases. Some lock in the price. Know which you have.
Ask: “What happens if there’s a force majeure event?”
This covers things like natural disasters, government actions, or major disruptions. The contract should define what qualifies and what happens to the order.
Ask: “What is the policy on overruns and underruns?”
Woven fabric production can vary. The contract should specify acceptable overrun/underrun percentages—typically +/- 5%. If you order 10,000 meters, the supplier can ship between 9,500 and 10,500. If it’s not in the contract, they could ship 8,500 and say “we made what we could.”
In 2024, a client from the UK had a contract with no overrun/underrun clause. The supplier shipped 8,500 meters of a 10,000-meter order and charged for 10,000. The client had to accept because the contract was silent.
Conclusion
Signing a fabric contract without asking these questions is like shipping a container without insurance. You might be fine. But if something goes wrong, you have no protection. I’ve seen too many buyers learn this the hard way.
At Shanghai Fumao , we use contracts that answer all these questions. Our contracts specify fiber content, weight, width, weave, color. They list shrinkage tolerances, colorfastness standards, defect rates. They have clear ship dates and penalty clauses for delays. They spell out payment terms, testing costs, and dispute resolution. They cover overruns, underruns, and force majeure.
I don’t do this because I’m paranoid. I do it because clear contracts make better relationships. When everything is written down, there’s nothing to argue about. We both know what we agreed to. We both know what happens if things go wrong. That clarity builds trust.
If you’re about to sign a fabric contract and you’re not sure it covers these points, stop. Ask the questions. Get the answers in writing. A good supplier will welcome the clarity. A bad supplier will resist.
My business director, Elaine, handles all our contract negotiations. She knows what needs to be in a fabric contract. She can walk you through our terms, answer your questions, and make sure you understand what you’re signing. She’s helped clients from around the world build contracts that protect both sides.
Contact Elaine directly: elaine@fumaoclothing.com
Tell her you’re reviewing a fabric contract. Let her show you what a clear, protective agreement looks like.
