This section of the contract of sale will be discussed in detail below.
Quality of goods
Determining the quality of goods in a contract of sale involves establishing the qualitative characteristics of the goods, i.e. a set of properties that determine the suitability of the goods for use for their intended purpose.
The choice of the method of determining the quality depends on the nature of the goods, on the practice prevailing in international trade in this product and other conditions.
The quality of the goods in the contract can be established in one of the following ways:
– According to the standard. This method involves the delivery of goods for quality that exactly corresponds to a certain standard. A standard is a document that gives a qualitative characteristic of the goods. In foreign countries, standards are developed by various governmental organizations (the so-called national standards), business unions, scientific and technical associations and institutes, insurance companies, etc. The application of national standards in foreign countries is not is mandatory. The most widespread abroad are standards developed by business associations and various associations, for example, international standards of the ISO 9000 series, ISO 14000. Sometimes trade practices use standards developed by large industrial firms. The existence of standards greatly facilitates the establishment of the quality of goods in sales contracts for goods with generic characteristics and for unified products. In this case, it is enough to refer to the number and date of the standard in the contract and indicate the organization that developed it. The standard determines the quality of the vast majority of goods traded in international trade, in particular, machinery and equipment, ferrous metals, cereals, rubber, cotton and many others.
– According to the specifications. This method is used in cases where there are no standards for this product and when, according to the special conditions of production and operation of the goods, it is necessary to establish special requirements for its quality. Technical specifications contain a detailed technical characteristics of the goods, a description of the materials from which it should be made, rules and methods of inspection and testing. Specifications usually determine the quality of goods produced on the basis of individual orders, in particular, for unique equipment, complex industrial equipment and apparatus, ships and other goods. Technical specifications for machines and equipment can either be provided by the customer himself and accepted by the supplier when signing the contract of sale, or developed by the supplier and confirmed by the customer. The technical specifications are given either in the text of the contract itself or in the annex to the contract.
– According to the specification specified in the contract. The specification usually contains the necessary technical parameters that characterize the product. Specifications can be drawn up by exporters, importers, various associations and other organizations, both national and international. In the contract, in this case, it is necessary to indicate the organization that compiled the specification, and give the main indicators of this specification.
– According to the pattern. This method involves establishing the quality of the goods in the contract in accordance with a certain sample, agreed and confirmed by the parties and being a standard. As a rule, the contract includes an indication regarding the number of samples taken and the order of comparison of the delivered goods with the sample. It is usually customary to take three samples. One copy of the sample is kept by the buyer, another by the seller, the third by a neutral organization (for example, a chamber of commerce) specified in the contract. Normally, the contract provides for the parties to keep the samples for a certain period from the date of receipt of the last instalment of goods. The method of determining the quality of a product from a sample is used mainly in the trade of consumer goods, as well as in certain types of machinery and equipment of individual manufacture. Quite often, this method is used to determine the quality of goods with individual characteristics, for example, fruits.
– On a preliminary inspection. In the contract, this method is indicated by the words “inspected-approved” (English – inspected-approved; French – vu et approuve; German– besichtigt-genehmigt). With this method, the buyer is given the right to inspect the entire batch of goods within the established period. The seller guarantees the quality of the goods as inspected and approved by the buyer. In this case, the seller is not responsible for the quality of the goods actually delivered, unless there were hidden defects in the goods that the buyer could not identify during the inspection of the goods and of which he was not informed before the transaction. According to the preliminary inspection, goods are usually sold at auctions and from warehouses.
– On the content of individual substances in the product. This method of determining the quality involves the establishment in the contract as a percentage of the minimum permissible content of nutrients and the maximum permissible content of undesirable elements or impurities. For example, in contracts for metals and ores, the quality indicator is the content of the main substance and individual impurities; in the sugar trade – the content of sucrose; in the sale of oilseeds and cakes – oil content, etc.
– On the release of the finished product. With this method, the contract establishes an indicator that determines the amount of the final product that must be obtained from the raw materials.
(for example, refined sugars from raw sugar, yarn from wool, oils from seeds). This indicator can be set both as a percentage and in absolute terms.
– On fair average quality – FAC (Angd. – fair average quality). This method is used mainly in grain contracts. The contract specifies that the quality of the goods must correspond to the fair average quality of grain in a certain period and at the established place of shipment.
– By natural weight. This method also determines the quality of cereals. Natural weight is the weight expressed in kilograms of one hectoliter (volume unit) of grain. Natural weight reflects the physical properties of the grain (shape, grain size, fullness, specific gravity) and gives an idea of the quantitative yield of flour and cereals from it. Indicators of natural weight are usually used with other indicators (for example, the content of foreign impurities in the grain).
– The method of “tel-kel” means the delivery of goods “as it is” (French : tel quel, telle quelle). In this case, the seller is not responsible for the quality of the goods supplied. The buyer is obliged to accept the goods, regardless of their quality, if they correspond to the name (type, variety) specified in the contract. This method is used, in particular, when selling grain crops, citrus fruits “at the root” (not yet removed), as well as in the sea transportation of goods, when the seller is not responsible for the deterioration of the quality of the goods in transit.
In addition to the listed main methods of determining the quality of goods, some other methods can be used in the contract, for example, indicators of the size of individual parts of the goods (coal, seeds, salt), indicators of the color of the goods (cotton, sugar, rubber), smell, etc.
Quite often, the quality of the goods in the contract is determined by the use of two or more methods. In the absence of a declaration of quality in the contract, it is generally considered that the quality of the goods supplied must be of the average quality customary in the country of the seller or in the country of origin of the goods.