“Bad” Arrival

#5 – Relying on verbal agreements without confirmation in writing

Imagine a distressed load arrives and that buyer and seller work out a price adjustment equal to $3.00 per carton.  Further imagine that based on this agreement, the buyer doesn’t bother to get an inspection certificate and simply short-pays the seller’s invoice by $3.00 per carton, believing the invoice is fully satisfied.  Is this the end of the story?  Well, maybe.  If the buyer confirmed the price adjustment in writing (with a timely fax or email) and the seller failed to object to this writing, then the buyer will likely be found to have supported its alleged price adjustment.  But if the price adjustment is not confirmed in writing and the seller denies the alleged price adjustment, the buyer will be responsible for the original invoice price.  Preventing this outcome is simply a matter of habitually confirming agreements (including modifications to agreements, such as price adjustments) in writing by timely fax or email. 

#6 – Counting on pictures alone to prove the quality or condition of produce

Digital images are great for informally resolving trouble loads between buyer and seller because they allow the seller to see what the buyer is seeing and therefore help the parties work out an amicable settlement.  But if the dispute is ultimately resolved formally, photographs will likely be given little weight because unlike an inspection certificate, they do not quantify defects across the entire load.  If a dispute must be resolved formally, you want the benefit of an inspection certificate issued by a trained and impartial federal inspector rather than a handful of photographs of bruised fruit. 

#7 – Rejecting a portion of a distressed load

When considering rejecting produce to a seller (as opposed to a carrier) it is important to remember that the entire “commercial unit” must be rejected.  Receivers may not unilaterally accept some pallets and reject others—it’s an all or nothing proposition.  According to PACA regulations, a ‘commercial unit’ is “a single shipment of one or more perishable agricultural commodities tendered for delivery on a single contract” and “such commercial unit must be accepted or rejected in its entirety.”  In other words, receivers should realize that a partial rejection constitutes acceptance of the entire load. 

#8 – Listening to the seller when he/she says “Don’t worry about getting a government inspection”

If you will be taking possession of product and filing a claim based on a breach of contract and resulting damages, then it is your responsibility to prove the breach and damages.  Similarly, if you will be handling the product on consignment or on a price-after-sale basis, an inspection will be needed to support returns.  Any suggestion that you should not document the condition of defective produce is misguided and not in your best interest.