In a goods sale transaction, the parties often establish the quality standards of the goods along with the buyer’s right to inspect their compliance with those standards.

This article was consulted by Lawyer Nguyen Quang Trung

Drafting the buyer’s right to inspect the goods in a commercial contract is an important part of ensuring transparency and fairness in the transaction. From the seller’s perspective, there are a number of issues to note when drafting this clause to protect their rights and ensure a smooth transaction.

1. Clearly define the scope and timing of goods inspection

Scope of inspection: The contract should clearly stipulate the scope of goods inspection that the buyer is allowed to carry out. This includes checking the quantity, quality, type, and other technical characteristics of the goods. The seller should ensure that the scope of the inspection is not too broad, to avoid unnecessary inconvenience and expense.

Timing of inspection: It is necessary to clearly define the time of inspection of the goods, which can be before delivery, at the time of delivery, or after delivery. Normally, the inspection should be carried out before delivery to avoid future disputes. However, in some cases, the inspection may be postponed until the goods arrive at the destination.

2. Regulations on inspection procedures

Inspection procedures: The contract should describe in detail the inspection procedure for the goods, including specific steps that the buyer must follow. This may include giving the seller advance notice of the time and place of the inspection, the inspection methods used, and the preparation of inspection records.

Inspection records: It is important to prepare inspection records to record the results of the inspection and serve as evidence in case of dispute. The inspection report must be made in writing, signed by representatives of both parties, and clearly state information about the goods, the inspection results, and the opinions of both parties.

3. Handling when discovering substandard goods

Notification and handling: The contract must clearly stipulate the notification and handling when discovering substandard goods. The buyer must notify the seller within a reasonable period of time after discovering the problem. The seller must be responsible for handling these problems, which can be repair, replacement of goods, or price reduction.

Buyer’s responsibilities: The clause must also clearly stipulate the buyer’s responsibility for inspecting the goods. If the buyer fails to conduct the inspection as agreed, the seller has the right to continue delivery without waiting for the inspection. The seller will not be responsible for defects that the buyer knew about or should have known about but did not notify promptly.

4. Provisions on inspection costs

Inspection costs: The contract should also clearly state which party will bear the costs of inspecting the goods. Normally, the buyer will bear the costs of inspection if the inspection is carried out at the seller’s premises or at a neutral location. However, if the inspection is carried out at the buyer’s premises, the costs may be shared or borne by the seller.

5. Relevant legal and regulatory issues

Legal compliance: The goods inspection clause should comply with current legal regulations, including the Commercial Law 2005 and related legal documents. This ensures that the clause is legally valid and can be enforced in the event of a dispute.

International regulations: In the case of international commercial contracts, the goods inspection clause should comply with international regulations such as Incoterms and the United Nations Convention on Contracts for the International Sale of Goods (CISG). This helps ensure that the clause is consistent with international practice and recognized by the parties involved.

6. Other notes

Negotiation and agreement: The seller should proactively negotiate and agree with the buyer on the goods inspection clause. This helps ensure that the clause is drafted fairly and reasonably, while minimizing the risk of future disputes.

Legal advice: The seller should consult legal experts or lawyers to ensure that the goods inspection clause is drafted in accordance with legal regulations and protects its rights.

Conclusion

Drafting the buyer’s right to inspect the goods in a commercial contract is a complex task and requires carefulness. The seller should pay attention to issues regarding the scope and time of inspection, inspection procedures, handling when detecting unsatisfactory goods, inspection costs, and related legal regulations. By following these notes, the seller can protect its interests and ensure the transaction process goes smoothly and efficiently.