INSPECTION

ACCEPTANCE AND REJECTION

Group
1. Nguyn Th Thu Hin

1213320056

2. Lng nh Hng

1213320065

3. Th Ngc Lan

0952015164

4. Phm Nh Ngc

1211110486

5. Trn Trng Trnh

1213320190

1.Inspection

2. Implied Warranties

3. Acceptance and Rejection

I. INSPECTION
What is Inspection?
An action includes examination, measurement,
testing, comparison of materials or goods

The inspection can arise from:

+ the request of the seller
+ the request of the buyer
+ the request of Government or specialized agencies

I. INSPECTION
The main purpose of Inspection
- When the goods arrive, the buyer inspects them
to make sure that it conform with the agreements
in the contract
- If the goods are inferior, the buyer
has to right to reject or cancel the
contract

I. INSPECTION
2 types of defect
Patent defects: wrong items, broken or missing parts,

scratchers, lost delivery,

Latent defects: structural weaknesses, failure to operate
in high or low temperature, high fuel consumption

How can Buyer discover latent (hiden) defects?

The defects liability period: a defined amount of
time for hidden defects to come to light

I. INSPECTION
Inspection: Right or Duty?
right or duty depends on the different laws
- The Vienna Sales Convention (CISG) and German law,
inspection is a duty: the buyer must examine the goods, or cause
them to be examined, within as short a period as is practicable in
the circumstances.
- Uniform Commercial Code (UCC) in United State,
inspection is a right: The buyer has a right before payment or
acceptance to inspect them at any reasonable place and time and
in any reasonable manner

An exception: contract allowing the shipment C.O.D

(cash on delivery) or payment against documents of title
- The contract in which parties agree there is no right
to inspect
- In that case, the buyer is not entitled to inspect
the goods before payment of the price when the
contract provides

II. IMPLIED WARRANTIES

What is implied warranty?
A guarantee made without being specially mentioned

3 types of implied warranties:

- Implied Warranty of Conformity with the Contract
- Implied Warranty of Merchantable Quality

- Implied Warranty of Fitness for Intended Purpose

Implied Warranty
of Conformity with the Contract
2 types of non-conformity
- major discrepancies
- minor discrepancies

How to apply?
Only fundamental breaches allow the buyer the right
to reject the goods and cancel the contract
The buyer may declare the contract avoided if the
failure by the seller to perform any of his obligations
under the contract or this Convention amounts to a
fundamental breach of contract
-The Vienna Sales Convention (Article 49)-

Implied Warranty
of Conformity with the Contract
What is an fundamental breach?
A breach of contract committed by one of the
parties is fundamental if it results in such detriment to
the other party as substantially to deprive him of what
he is entitled to expect under the contract, unless the
party in breach did not foresee and a reasonable
person of the same kind in the same circumstances
would not have foreseen such a result.
-The Vienne Sales Convention (article 25)-

Implied Warranty
of Merchantable Quality
How to apply?
For the implied warranty of merchantability to exist, the
seller is a merchant with respect to goods of that kind

What is Merchantable goods?

- The goods must be fit for the ordinary purpose
they are intended to serve
- pass without objection in the trade under the contract
description
- be adequately contained, packaged, and labeled as the
agreementmay require
(UCC 2-314)

Implied Warranty
of Fitness for Intended Purpose
How to apply?
- the buyer has knowledge of the buyer's intended
use of the goods
- the buyer relies on the seller's skill or judgment in
selecting or furnishing suitable goods
there is no requirement that the seller be a regular
merchant of such goods.

Limitations and Exclusions

from the Implied Warranty
It is possible for sellers to exclude or modify
implied warranties

How to apply?
the seller generally must provide the exclusion or
modification in a record, which generally mean in a
printed document and in a manner that makes the
exclusion or modification conspicuous

Limitations and Exclusions

from the Implied Warranty
Example:
For the warranty of merchantability:The seller
undertakes no responsibility for the quality of the
goods except as otherwise provided in this contract.
For the warranty of fitness for a particular purpose
involving a sale to a consumer: The seller assumes
no responsibility that the goods will be fit for any
particular purpose for which you may be buying
these goods, except as otherwise provided in the
contract.

Limitations and Exclusions

from the Implied Warranty
Other options for disclaiming implied warranties
include using phrases such as with all faults or as is
be aware that a dozen states do not allow consumer
goods to be sold as is

The goods
conform with
the contract

GOODS
DELIVERED

Yes
The Buyer
inspect the
good

No

Yes
Are the
goods of
merchantable
quality?

INSPECTION AND
IMPLIED
WARRANTIES

No

Is
the failure to
conform
fundamental

No

Yes
No

Yes
Are
the goods fit
for their
intended
purpose?

No
Will or can
the Seller cure
the fault?

Yes

No

Yes
ACCEPTANCE

PART
ACCEPTANCE

Does the
Buyer accept
the goods in
part?

No
REJECTION

III. Acceptance and Rejection

Rejection: Total or partial?
- English law requires rejection of all the contract
goods unless contract expressly allows part rejection
- German law and the Vienna Sales Convention both
allow rejection of only defective or non-conforming
goods.

III. Acceptance and Rejection

... if the goods or tender of delivery fail in any respect
to conform to the contract, the buyer may:
1.
Reject the whole; or
2.
Accept the whole; or
3.
Accept any commercial unit or units and
reject the rest
-UCC 2-601. Buyer's Rights on Improper Delivery-.

III. Acceptance and Rejection

The exporters right to cure
In the cases of cancellation of the contract, the exporter
has a right to cure simply a duty cure if the buyer so
requests.
... the Seller may, even after the date of delivery, remedy
at his own expense any failure to perform his obligations,
if he can do so without unreasonable delay and without
causing the buyer unreasonable inconvenience or
uncertainty off reimbursement by the Seller of expense
advanced by the Buyer.
-Article 48 CISG-

 (1) Where any tender or delivery by the seller is rejected

because non-conforming and the time for performance has
not yet expired, the seller may seasonably notify the buyer
of his intention to cure and may then within the contract
time make a conforming delivery.
(2) Where the buyer rejects a non-conforming tender
which the seller had reasonable grounds to believe would
be acceptable with or without money allowance the seller
may if he seasonably notifies the buyer have a further
reasonable time to substitute a conforming tender.
- UCC, 2-508
Cure by Seller of Improper Tender or Delivery-

Conclusion
1. The buyer has the right (in some legal systems, the duty)
to inspect the goods.
2. Three implied warranties apply to most delivered
goods, even if he exporter has given no express warranty:

Warranty of conformity with the contract

Warranty of Merchantability
Warranty of Suitable for Intended Purpose

3. The question of warranty is disposive: exporters can

exclude all warranties
4. Systems vary in their thinking about whether rejection of
contract goods must be total or can be partial.
5. The right of the exporter to cure any defects in his
delivery is controversial; if an exporter wants this right,
the contract should contain the necessary provision.

EX.1
The Buyer may, at the Buyer`s option, inspect the
goods prior to shipment. At least fourteen days
before the actual delivery date, the Seller shall give
notice to the Buyer, or to any agent nominated by
the Buyer, that the goods are available for
inspection. The Seller shall permit access to the
goods for purposes of inspection at a reasonable
time agreed by the parties.

Translation:
Ngi Mua c quyn thc hin kim tra hng ho
trc ngy giao hng. Ngi Bn phi thng bo
cho Ngi Mua, hay bt c i l no do Ngi
Mua ch nh v vic sn sng cho kim tra cc l
hng t nht 14 ngy trc ngy giao hng thc t.
Ngi Bn phi to iu kin cho vic tip cn hng
ho v mc ch kim tra vo mt thi im hp l
c hai bn nht tr.

EX.2
The Seller shall make good the defect or damage
as soon as practicable and at his own cost.

Translation:
Ngi Bn phi t chu chi ph khc phc khim
khuyt hay thit hi cng sm cng tt.

EX.3
Trch nhim ca Ngi Bn v sa cha hay thay
th hng ho b khim khuyt l trch nhim duy
nht ca anh ta theo hp ng ny hay theo nhng
vn bn no khc, v Ngi Bn khng phi chu
trch nhim bi thng Ngi Mua cho bt c s
mt quyn s dng v cng trnh thuc v Ngi
Mua (d hon thnh ton b hay mt phn); hay
cho bt c s mt mt no v li nhun hay bt c
thit hi gin tip hay h qu m Ngi Mua phi
chu.

Translation:
The duty of the Seller to repair or replace defective
items is the Seller`s only duty under this contract or
otherwise, and the Seller shall not be liable to
compensate the Buyer for any loss for use of any
works belonging to the Buyer (whether complete or
partial) or for any loss of any profit or any indirect
or consequential damage that may be suffered by
the Buyer.