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transnational law transnational law (lex mercatoria or international business law) and "Deadline for notice of defects" 2016-03-01 13:58:16 https://www.trans-lex.org/img/logo_ball.png
Principle

No. VI.2 - Deadline for notice of defects

(a) The buyer may not rely on a lack of conformity if the buyer does not give notice to the seller within a reasonable time specifying the nature of the lack of conformity. The time starts to run when the goods are supplied or when the buyer discovers or could be expected to discover the lack of conformity, whichever is later.
 
(b) The buyer loses the right to rely on a lack of conformity if the buyer does not give the seller notice of the lack of conformity within two years from the time at which the goods were actually handed over to the buyer in accordance with the contract. 

(c) Where the parties have agreed that the goods must remain fit for a particular purpose or for their ordinary purpose during a fixed period of time, the period for giving notice under subsection (b) does not expire before the end of the agreed period. 

(d) The buyer does not have to notify the seller that not all the goods have been delivered if the buyer has reason to believe that the remaining goods will be delivered.
 
(e) The seller is not entitled to rely on this Principle if the lack of conformity relates to facts of which the seller knew or could be expected to have known and which the seller did not disclose to the buyer.

Commentary
1 This Principle follows from the presumption of professional competence of international businessmen. In the interest of legal certainty and speed, the buyer must notify the seller of a lack of conformity of the goods delivered to him by the seller and the nature of such lack if he wants to preserve his legal right arising out of such non-conformity.

2 The timeframe within which such notice must be given by the buyer must be determined against the Principle of reasonableness, taking into account all circumstances of the case, including the nature of the transaction and of the goods sold, practices established between the parties and relevant trade usagesPrinciple IV.4.2 applies to the notice.

3 Subsection (b) is derived from Art. 39 (2) CISG which provides that the buyer loses his right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee.

4 Given that the Principle is intended to protect the seller against unexpected claims of non-conformity by the buyer, the seller is not protected by the Principle in situations in which such protection would be contrary to the overriding Principle of good faith. Subsection (e) clarifies that such a situation exists if the lack of conformity relates to facts of which the seller knew or could be expected to have known and which the seller did not disclose to the buyer

Please cite as: "Commentary to Trans-Lex Principle , "
References
Arbitral Awards
Doctrine
International Legislation
Model Laws
Contract Clauses
1. Inspection of Goods
Sales & Purchase Contract
Inspection
The inspection of the goods shall be performed by Seller or its designee in the country (from which the goods are exported) according to the export regulations of the country and such inspection shall be considered as final and conclusive in all respects regarding the goods.
Warranty
Seller warrants that Goods provided by Seller shall be free from defects in materials, workmanship and title and shall be in accordance with the specifications of the contract. Seller's obligations as set forth below shall begin on the date of acceptance as specified in the contract or on the date upon which the Goods are placed into use by the Buyer, whichever occurs first, and shall continue for a period of {X} months/years from that date. Seller's obligation under this warranty is limited to replacement or repair, at Seller's option, of Goods returned to Seller. To receive the benefit of this warranty, the Buyer must give Seller written notification within {X} days after the Buyer knows, or reasonably should have known of the defect. This Clause sets forth the exclusive remedies for claims based upon defects as specified herein, whether the claim is in contract, warranty, tort (including negligence) or otherwise. The foregoing warranties are in lieu of all other warranties express or implied, including warranty of merchantability and fitness for particular purpose. Seller shall not be liable for incidental or consequential damages - (International Contracting: Law and Practice - Larry A. DiMatteo - §2.05 B - S. 28).
Delivery Term
Upon arrival at the Purchaser's installation site, the authorized representatives of both parties shall open, inspect and inventory the items against the Seller's packing sheets. In the event of any discrepancy between the inventory and the packing sheets, the Seller shall be responsible to correct the discrepancy - (International Contracting: Law and Practice - Larry A. DiMatteo - §3.05 - S. 63).
Warranty Provision
Seller warrants that the items produced by Seller shall be free from defects in material, and workmanship. Seller's warranty obligation only applies to defects (...) within {X} days of the discovery of the defect (...) - (International Contracting: Law and Practice - Larry A. DiMatteo - §3.25 - S. 103).
Warranty
Sellers warrants that all work and goods furnished pursuant to this Contract shall strictly conform to applicable specifications, drawings, samples, descriptions, and other requirements of this Contract and be free from defects in design, material, and workmanship and shall be fit for purpose and of satisfactory quality. This warranty shall begin upon final acceptance and extend for a period of {X}. If Purchaser identifies a non-conformity in the good, then without prejudice to any other remedy, Seller, at Purchaser's option, shall promptly repair or replace the good. Transportation of replacement, return of non-conforming goods shall be at the Seller's expense. If repair or replacement is not carried out promptly, Purchaser may elect to return, repair, or replace the non-conforming goods at Seller's expense. All warranties shall ensure to the benefit of the Purchaser and its customers, end-users, and ultimate purchasers - (International Contracting: Law and Practice - Larry A. DiMatteo - §6.05 (A) - S. 208).
Conformity of the Goods
The Buyer is required to give notice of a lack of conformity of the goods only to the extent that such lack of conformity is apparent and the Seller could not have discovered such despite through quality controls. The Buyer does not otherwise lose the right to rely on a lack of conformity of the goods, whether or not he inspects the goods or gives notice of a lack of conformity.
2004
Inspections and Claims
The Buyer shall inspect the goods within 7 days after delivery in accordance with the criteria specified herein. Any quality claims shall be issued by Buyer in writing in 3 days upon detection, and shall be inspected by a third party agreed upon by both parties. If the Buyer fails to raise a claim within 10 days after delivery, the Seller’s products shall be deemed as qualified.
2007
Quality Disputes
In case of any quality discrepancy, Party B shall inform Party A in writing and provide written test report and result as well as product track number of Party A (...) if Party A identifies after testing the issues as attributed to its own product and quality problems, it shall (...) immediately arrange for exchanging or returning of defective products (...) all fees incurred shall be borne by Party A (...) a defective percentage less than X% (...) shall be regarded as normal conveyance loss out of the scope of replacement and returning. Quality problems due to improper operation of Party B during inspection and production is not covered by Party A.
2008
Services Contract

Purchaser and its customer may inspect all Work at reasonable times and places. Seller shall provide all information, facilities and assistance necessary for safe and convenient inspection without additional charge. No such inspection shall relieve Seller of its obligations to furnish and warrant all Work in accordance with the requirements of this Contract. Purchaser's final inspection and acceptance shall be at destination. If Seller delivers non-conforming Work, Purchaser may, in addition to any other remedies available at law or at equity: (i) accept all or part of such Work a an equitable price reduction; or (ii) reject such Work. Seller shall not re-tender rejected Work without disclosing the corrective action taken - (International Contracting: Law and Practice - Larry A. DiMatteo - §8.10 - S. 293).
Construction & O&M Contract
Examine against Receipt
Contractor shall examine the appearance and quantity of the material, equipment and any other items which form the part of Plan and Construction Equipment supplied by Purchaser or Employer immediately upon receipt thereof and submit the receipt thereof to the Purchaser and give timely notice in writing to Purchaser of the apparent flaws, damages or surplus or shortage in quantity thereof, if any (...)
1997
2. Consequences Linked to Absence of Notification
Sales & Purchase Contract
Inspections and Claims
The Buyer shall inspect the goods within {X} days after delivery in accordance with the criteria specified herein. Any quality claim shall be issued by Buyer in writing in {X} days upon detection, and shall be inspected by a third party agreed upon both parties. If the Buyer fails to raise a claim within {X} days after delivery, the Seller's products shall be deemed as qualified.
Quality/Quantity Discrepancy
In case of quality/discrepancy, claim should be filed by the Buyer within {X} days after the arrival of the good at port of destination, while for quality discrepancy, claim should be filed by the Buyer within {X} days after the arrival of the goods at port of destination.
Inspection Methods and Time Limit for Objection
In the case that Party B finds any quality problems according to contracted technical standard, objection shall be sent to Party A within {X} days after receipt of products. If no written objection is raised within the period, it is deemed that the quality of Party's A products is qualified with contract requirements.
2008
Construction & O&M Contract
Examine against Receipt
(...) If Contractor fails to give timely notice to Purchaser, the losses or damages to Works arising from the said flaws, damages or surplus or shortgae shall be made good at the expense of the Contractor.
1997
Notice of Defects
Defects (...) shall be notified to the Contractor without undue delay after the defect has appeared and in no case later than two weeks after the expiry of the defects liability period. The notice shall describe how the defect manifests itself. If the Purchaser fails immediately to notify the Contractor of a defect which may cause damage to the Works, the Contractor shall not be liable for any damage which could have been avoided if the notice had been given within such time.
2001
A project of CENTRAL, University of Cologne.