No matter what industry your company is part of, your success largely depends upon your ability to provide valuable and high-quality products or services to your customers. Thus, if you contract with a supplier for merchandise, ingredients or other goods, and you get a shipment that doesn’t conform to that contract, it can cost your company incalculable damage to its reputation and ability to continue to satisfy customers.
Therefore, you should understand your right to inspect goods before you accept and pay for them – as well as your right to reject nonconforming goods.
The California Commercial Code
The Uniform Commercial Code (UCC) is a set of laws that govern things such as commerce, supply contracts, and the rights of buyers and sellers. Every state has adopted the UCC, although some states (such as California) have modified certain provisions of it before enacting it as state law.
This means that you can expect the same or similar rules to apply regardless of whether your supply contract involves other companies based in California, or if you are importing goods from another state.
If you bring a lawsuit in a California court, and you entered into the contract in California, then California’s version of the UCC (known as the California Commercial Code) will likely apply, unless your contract specifically states otherwise in a forum selection clause.
Your right to inspect
Under both the California Commercial Code and the UCC, when your supplier delivers the goods that your company ordered, you have the right to inspect them before paying for them. You can carry out this inspection at any reasonable place or time, and in any reasonable manner.
Once you pay for the goods, you are generally deemed to have accepted them in fulfillment of the contract. If you are not satisfied that their quality conforms to the terms of your contract, you have the right to send them back.
In most circumstances, if the deadline for the delivery has not yet passed, your supplier then would have the right to fix the problem by sending you conforming goods before you gain a cause of action for a breach of contract suit.
Running a business can be extremely difficult for a variety of reasons. Receiving nonconforming goods from a supplier can result in costly delays and other damage to your company. Fortunately, the California Commercial Code protects your right to ensure conformity with the terms of the contract you signed.