Month: December 2017

In the produce industry, providing an account of sales is the most common method to claim damages resulting from a breach of contract or product received in deteriorated condition. When a buyer chooses to claim damages and decides to submit an account of sales, it is best to be prepared to submit an itemized account of sales. This means including the date, amount and price for each sale made on the load in question less expenses such as freight, inspection(s), brokerage fee(s) and any additional expenses agreed to by the parties. An itemized account of sales not only shows net returns but helps to demonstrate if the product was moved promptly.

For clarification purposes, an itemized account of sales is only required in connection with consignment transactions. DRC strongly suggests that every buyer/receiver should be prepared to submit an itemized account of sales when claiming damages or when a problem arises.

If an account of sales is not available, be aware that there are other methods to determine fair value of the product. Sometimes this means reducing the invoice value by the percentage of defects on the federal inspection which may or may not be representative of actual losses.

DRC Trading Standards under section 6 indicate that “Sales Tickets/Invoices” shall be filed or stored for a period of two years. In the event that your client challenges the account of sales in an arbitration process, you may be required by the arbitrator to produce the “Sales Tickets”. The sales tickets and expenses should match the information in the itemized account of sales.

The best way to lay out the information is on a spread sheet and should include:

1. Date of receipt and date of each sale,
2. The quantities sold at each price, or other disposition of the produce and,
3. The expenses properly incurred.

For your reference, HERE is a sample template of an Itemized Account of Sales. For any question or clarification about account of sales, please contact the DRC Help Desk:

DRC Help Desk | 613-234-0982 | [email protected]

Luc Mougeot, DRC Vice-President, attended the 20th meeting of the CODEX Committee on Fresh Fruits and Vegetables held in Kampala, Uganda this past October.

DRC participates on the CODEX Committee on Fresh Fruits and Vegetables in order to ensure that standards being proposed or revised are written in a manner that is as consistent as possible with Canadian and U.S. standards. Ensuring consistency helps to minimize the impact on producers when they ship overseas.

“CODEX sets the high level international standards that we are supposed to work towards and look towards implementing when we make domestic revisions,” said Mr. Mougeot.

CODEX Alimentarius Commission is an international standard setting body for everything from health and safety to grade and commodity standards. CODEX standards are utilized by many countries that may not have their own domestic standards. While Canada and the U.S. have national domestic standards, CODEX standards can set the tone for future revisions to Canadian and U.S. standards. The other area they can impact is for shippers sending out of Canada to a country that doesn’t have national standards and that has adopted CODEX standards.

Most CODEX member countries that apply CODEX standards will use those grade standards on import controls. They may use them for domestic control and they may use them for export control for countries such as Canada. Other standard setting bodies include the Organization for Economic Co-operation and Development (OECD) and the United Nations Economic Commission for Europe (UNECE).

Sometimes DRC sees references to Cat 1, Class 1 on contracts without any reference to a standard body such as CODEX, OECD and UNECE. In the absence of recognized grade or reference to grade, we tend to fall back to domestic standards when applying inspections. If both parties have agreed to class and properly referenced appropriate standards, it is important to note that individuals using these categories may face challenges when it comes to an inspection and proving non-domestic standards apply.

“DRC has obtained official observer status with respect to CODEX and, as we move towards potentially taking over grade standards from CFIA, our participation will continue to enrich discussions and standard setting within CODEX,” concluded Mr. Mougeot. CFIA is the head of the official delegation and CFIA’s Kevin Smith is the representative and currently also serves as an ex-officio government representative on the DRC Board of Directors. The next meeting will occur in 2018 (date and location still TBD) and prior to the meeting, Mr. Smith will reach out Canadian industry sectors to establish industry positions on draft standards.

CODEX questions? Please contact the DRC Help Desk:

DRC Help Desk | 613-234-0982 | [email protected]