Name and Quality
Name of commodity
does not only concern the interests
of the seller and the buyer
involved in the international merchandise trade
but also concern charges and duties
levied on the commodity throughout the performance of the contract
Therefore
the commodity should be clearly
and normatively named in the sales contract
Adopting the normative names
will highly facilitate the import and export declarations
What is quality
Quality
In international transactions
there are different ways to describe quality
The following shows
different methods to specify quality of commodities
We can see quality can be defined by the real commodity
in special trade patterns like consignment and auction
by samples of average quality
or by description like specification
grade
standard
brand or trademark
origin
illustrated instruction etc
The goods are displayed at the trade fair or at the premises
We call this Sale by actual goods
Sale by sample
here is an example
Sample should be representative
The goods should be strictly the same as the sample
The sample can be provided by the seller or the buyer
Here put forward a question
Will there
be any problem if the seller sends the only sample to the buyer
Before answer the question
we should understand the following professional phrases
Duplicate Sample
In the case of sale by seller's sample
the seller should keep one or more
equivalent samples for himself
The sample kept by the seller is called a duplicate sample
The duplicate sample can serve as proof quality
if there is a dispute about the equality of the goods later on
Sealed Sample
The sample kept by the third party is called a sealed sample
So if there was only one sample
that had been sent to the buyer
the sender
can have no evidence to support his saying that the goods delivered
are strictly the same as the sample
when there is any doubt from the buyer about the quality
Therefore
it is recommended to have at least two samples
one is sent to the buyer
the original sample
and the other is kept by the seller
that is a duplicate sample or keep sample
Counter Sample or- Confirming Sample
In the case of sale by buyer's sample
in order to reduce the possibility of later disputes
the seller may produce a similar sample
according to the buyer’s sample
The seller will send the new sample to the buyer
for confirmation and approval
When the buyer accepts the sample made by the seller
it will replace the buyer's sample as the sample for sale
Under this situation
the sample made by the seller according to the buyer's sample
is called counter sample or confirming sample
About Intellectual Property
When receiving an order with the buyer’s sample
a seller should consider whether
he is able to provide the goods of required quality
and whether the sample
may infringe any intellectual property rights
We call IPR of the third party
As for the possibility of IPR infringement
the seller should know that
He takes no obligation if
the right or claim of a third party based on industrial property
or other intellectual property
results from the seller's compliance with technical drawings
designs
formulae
or other such specifications furnished by the buyer
If the styles
patterns
designs and trademarks
labels etc
designated by the buyers
should be involved in infringement of patent right
or cause any disputes
the buyers
shall be fully responsible for the consequences and settlement
According to CISG
If the sample is provide only to give an intuitive
impression on the counter party
it is necessary to indicate
The sample is only for your reference
otherwise
the sample will represent the quality of final delivery
In practice
samples are sometimes provided to represent
a certain aspect of commodity
such as material used
color
pattern etc
that is difficult to clarify with description
Sale by description involves sale by
Specification
Grade
Standard
Brand Name or Trade Mark
Name of origin
Instruction and illustration
Sale by Specification
For example
Some indices such as chemical composition
contents
length
sizes etc
can reflect the quality of the goods sufficiently
Describing quality by specification is simple as well as accurate
So it is widely used in contract
Sale by Grade
Look at the example
Some products can be divided into different grades
based on different specifications.
Sale by Standard
Look at this show
Standards are formulated
either by government or commercial organizations
Some of them are national standard
some are international standard
Many countries have their own standards
The typical international standard is ISO standard
Standards are updated frequently to keep pace
with the improving technology
When the quality is referred to some standard
both the title of the standard
and its edition should be included
Fair Average Quality
abbreviated as FAQ
For food products
like grain an fruit that are good enough to be sold.
It is recommended to clarify the FAQ
with specification just the example shows
Chinese Groundnut 1994 crop FAQ
Moisture max 13%
Admixture max 5%
Oil content min 44%
Let us talk about the last two important concepts
Quality latitude means that
The seller and the buyer
agree the quality of the delivered goods can vary
within an agreed range
Such as to stipulate a certain scope
To stipulate maxor min
stipulate more or less
allowance
Quality tolerance is an allowed
deviation in quality stipulated
by an international organization and accepted internationally
A certain deviation is allowed in the quality clause to allow some
flexibility in the quality indicators within a certain range
Commodity price can be adjusted within the range of quality
latitude
Let us have a Case Study to end this session
Company A of China exported Frozen Duck to Company B of Iraq
It was contracted that
all ducks were to be killed in Islamic way
However
Company A
knew nothing about the Islamic way of slaughtering
animals and processed the ducks in its usual way
Company B refused to take delivery when the goods
arrived and asked Company A
to dispose them immediately
Question
Did Company B have the right not to take delivery of the goods
Why
Analysis
Company B had the right not to take delivery of the goods
The quality of the goods
should be in conformity with that contracted
The processing way is one of the
intrinsic attributes that are integral part of quality
Ducks not slaughtered in the Islamic way
were difficult to find market in Iraq
That’s all thank you