A recent government procurement project at Yulin Vocational and Technical College in Guangxi has sparked widespread discussion after the institution spent 1.528 million yuan on equipment for a software development training lab, only to receive products that did not match the specifications. The 153 computers delivered came with downgraded graphics cards and pirated Windows software, posing potential infringement risks, while all three parties involved insisted the fault lay elsewhere, leading to a legal battle.
The first-instance court ordered the supplier to deliver goods that met the contract specifications and pay breach penalties. However, the second-instance court overturned this, ruling that the purchase contract was invalid and should be rescinded. Given that the college had already used the equipment and pirated software, the court decided to deduct the software costs from the total payment.
According to the college's official website, it is a public full-time higher vocational institution with about 4,000 students. Beyond its regular programs, the school offers emerging majors such as new energy vehicle technology, Internet of Things application technology, big data technology, and intelligent logistics technology. In July 2025, the college initiated a government procurement process for equipment for its software development training lab, with a project budget exceeding 1.53 million yuan.
Court documents from the first-instance ruling show that Guangxi Kaizhuang Trading Co., Ltd. (Kaizhuang) acted as the purchaser, while Guangxi Yongsheng Furniture Co., Ltd. (Yongsheng) was the supplier. The contract was set at a total value of 790,000 yuan, with Kaizhuang paying an advance of 600,000 yuan. Yongsheng was required to deliver and install the goods within the agreed timeframe, with the remaining 190,000 yuan to be paid after successful acceptance inspection. Any failures in the inspection would require rectification to meet standards.
As the project remained unresolved and the acceptance inspection was not completed, Kaizhuang filed a lawsuit demanding Yongsheng deliver goods that met the contract requirements, complete the installation and commissioning, pass the acceptance inspection, and pay a penalty of 79,000 yuan. Yongsheng countersued, alleging that Kaizhuang's subcontracting was illegal, making the contract void. They claimed they had fulfilled most of their delivery obligations and argued that Kaizhuang should pay the outstanding 190,000 yuan plus interest for late payment.
The first-instance court ruled that the contract was a true expression of the parties' intent, that the project involved the sale of software development teaching equipment and related accessories rather than construction work, and that the contract did not violate any mandatory legal provisions. It deemed the contract valid. In January of this year, the court ordered Yongsheng to immediately deliver the conforming goods, complete installation and acceptance, and pay interest on the 190,000 yuan balance until the acceptance process was finished.
Yongsheng appealed the first-instance verdict, seeking to overturn the decision, declare the contract invalid, and order Kaizhuang to pay the 190,000 yuan balance and accrued interest. The second-instance court reviewed the case and noted that the current retail price for genuine Windows 11 activation codes on the Microsoft Store is 1,088 yuan per set.
Given these circumstances, the court reasoned that the contract was for an entire government procurement project, which Kaizhuang had subcontracted on a full turnkey basis to Yongsheng, constituting a complete transfer of the procurement project and rendering the contract void. It determined that since the project had been largely fulfilled and the equipment was already in use at the college, the issues of product defects and pricing should be addressed through price reduction and compensation.
Yongsheng argued that the contract did not explicitly require genuine software, but the court found that the contract stipulated Yongsheng must guarantee that the goods would not infringe on any third-party intellectual property rights. Consequently, it ordered a deduction for the cost of obtaining proper licenses, totaling 166,400 yuan, from the contract price. An additional 15,000 yuan was deducted for missing or defective accessories such as switches, audio processors, and microphones.
In June of this year, the second-instance court overturned the first-instance judgment, confirmed the contract was void, and ordered Kaizhuang to pay Yongsheng 8,536 yuan.
When asked about the case, a representative from the college stated that the supplier's products were defective, the school had consistently refused to sign off on the acceptance, and the issue was not the school's responsibility, adding that the college planned to sue the supplier. A spokesperson for Kaizhuang said that as the general contractor, they had bought the goods from Yongsheng, and that the owner, the contractor, and the supplier had all signed a joint confirmation acknowledging the project's issues. They noted that while the second-instance court declared the contract void, it neither voided the project itself nor ordered a return of goods and refund between the buyer and seller. Kaizhuang expressed willingness to purchase genuine software at their own expense, but the college would not agree to this plan.
A representative from Yongsheng maintained that the company had supplied computers according to the contractor's specifications, arguing that the contract never explicitly required genuine software, and that the choice of using genuine or pirated activation codes was not their concern.