DISPUTE TRADING CONTRACT OF COMPANY R.VN VS COMPANY P
The seller has negligence in the inspection of the goods which has clearly stated obligations in the contract. The detection of the error is also too late to be able to fix it without incurring damage that is not worth it. Aplus Law’s Attorney had consulted and represented clients to protect the interests of successful buyers at the Vietnam International Arbitration Center (VIAC)
R.VN Co., Ltd (hereinafter referred to as R Company) is a supplier of confectionery product packaging (boxes) with TULA labeling printed in Chinese to P Co., Ltd (hereinafter referred to as P Company) manufactured by R. The contract contains a provision for inspection of goods through 3 rounds, only those goods that have been stamped Q.C will be accepted by P company.
A dispute occurs when company P has sent goods to foreign partners, it is returned due to the foreign partner detecting the wrong label from TULA to TUHA. Company P did not pay for Company R’s goods for the above reasons.
R Company has sued at VIAC to demand payment of debt
Is the P company at fault for checking the goods? Is R Company exempt from liability in this case?
When taking on the case, Aplus Law’s Attorney noticed that the merchandise label was not a hidden defect but a defect that was visible to the naked eye. Tapping into buyers’ inspection errors is the key to solving the case.
By argument, Attorney has proven with 3 rounds of inspection of goods, the buyer can detect errors on the label of goods. The buyer’s failure to detect the wrong label is the buyer’s fault and this is the buyer’s must-know defect during the inspection of the goods.
In order for the seller to be exempt from the fault of the goods, it is necessary to further prove that “the buyer failed to notify the seller within a reasonable time after inspection of the goods”. In this case, the buyer only knew after the goods were exported to China, it took 2 months to notify the buyer of the error. After receiving the defective goods, the boxes have also been deformed, resulting in order to fix the defective goods must replace the container, not just replace the sticker. If the buyer reports the defect before the goods are shipped, it will only change the sticker and also not produce the damage of freight charges to Vietnam, damage to the packaging, damage to hiring workers.
Aplus Law’s Attorney had proved to the buyer and the arbitrators that the purchaser’s report to the seller for a period is not considered reasonable under Article 44.4 of the Commercial Law.
Therefore, the seller is exempt from the obligation in relation to the goods defect as the buyer has not checked the goods thoroughly and failed to notify within a reasonable time.