Under the Fruit and Vegetable Dispute Resolution Corporation (DRC) Good Inspection Guidelines, unless otherwise agreed, DRC members who receive product in a deteriorated condition must request a third-party quality inspection, preferably a government inspection, to demonstrate that the product fails to meet the agreed-upon quality standard (specs) or the DRC Good Arrival Guidelines. While there are many elements to consider when requesting an inspection, one of the most important factors for a receiver is ensuring that a representative sample of the load is available when the inspector arrives.
How is a representative sample determined?
For DRC purposes, unless otherwise agreed, a useful rule of thumb comes from the Canadian Food Inspection Agency’s “appeal inspection” requirements. To qualify for an appeal inspection, more than 75% of the load must be available for inspection. Otherwise, if less than 75% of the load remains, an appeal inspection cannot be conducted because the remaining product is not considered a representative sample.
Additionally, the percentage of the product not available for inspection is normally considered to be in sound condition.
What if less than 75% of the load is available for inspection?
If less than 75% of the shipment remains available for inspection, contact the shipper or seller immediately and let them know the reasons why you are unable to have the full load available for inspection.
The parties should discuss whether the quantity remaining can still be considered representative of the full load. Another option is for the receiver to pay in full for the percentage of the product that is not available for inspection and offer to claim damages on the percentage of the load remaining, provided the inspection shows that the product fails to meet the agreed-upon quality standard (specs) or DRC Good Arrival Guidelines.
Handling product before an inspection
Receivers should exercise caution when moving, reselling, or otherwise handling produce before an inspection takes place.
If part of a shipment has already been sold to customers and those customers later reject the product, obtaining an inspection after the product is returned may not preserve the receiver’s rights against the shipper or seller. Even if the full quantity is recovered, the product may be considered “handled,” and it may be argued that the shipment has lost its identity after leaving the receiver’s control and being returned.
For this reason, receivers should arrange for an inspection as soon as a quality problem is discovered and before significant portions of the shipment are sold, moved, or otherwise handled.
Key Takeaway
When quality concerns arise, a timely inspection is critical. Equally important is ensuring that enough of the shipment remains available to constitute a representative sample. Without one, a receiver may face significant challenges in proving a claim and recovering losses from the shipper or seller.
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