Following Part 1 on notes for drafting delivery terms in sales contracts, in this part (Part 2), we would like to share with you some notes on receiving goods upon delivery. These notes will help you determine which criteria you need to specify in the contract as a basis for checking and accepting goods at the time of delivery.

1. Goods delivery documents

Goods delivery documents are not simply an accompanying VAT Invoice as prescribed by law on accompanying documents when circulating goods on the market. Therefore, the specific documents accompanying the goods will vary depending on the type of goods, and may include a certificate of origin, Certificate of standard accompanying, Delivery bill, Receipt of delivery, and Power of authorization.… Therefore, to have a basis for receiving goods, in the goods delivery clause of the contract, the parties need to agree in detail on the seller’s responsibilities in handing over documents related to the goods. Which documents are expected to be handed over, the status of the documents as original/true copy/photocopy, how many copies…, specific recognition will help the parties anticipate the rights and obligations of each party, avoiding conflicts when each party’s understanding is different.

If the contract does not explicitly specify the documents accompanying the goods and the timing of their handover, the parties will refer to the provisions of commercial law to make adjustments. Accordingly, Article 42 of the Commercial Law addresses this issue as follows:

“Article 42. Delivery of goods-related documents

1. Where there is an agreement on the delivery of documents, the seller is obliged to deliver all goods-related documents to the purchaser within the time limit, at the place, and by mode already agreed.
2. Where there is no agreement on the time limit and place for delivery of goods-related documents to the purchaser, the seller must deliver such documents to the purchaser within a reasonable time limit and at a convenient place so that the purchaser can receive the goods.
3. Where the seller has delivered goods-related documents before the agreed time, the seller can still rectify errors in such documents within the remaining duration of the time limit.
4. When the seller, when rectifying errors mentioned in Clause 3 of this Article, causes disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to request the seller to deal with such disadvantages or bear such costs.”

2. Inspect and accept goods

The buyer has the right to inspect the goods at the time of delivery. However, the specific method of inspection and the scope of the buyer’s rights depend on the content stipulated by the parties in the contract. Based on the nature and quantity of the goods, the parties will choose the appropriate inspection and acceptance method. Therefore, some contents can be checked by the parties upon delivery, while others cannot. In this case, the parties will usually give each other a certain amount of time to comment on the goods received.

Regarding checking the number of goods, the terms of delivery and receipt of goods should specify the method of handling over-delivery or shortage of goods. Based on this, the buyer will receive the goods or refuse to receive them. In case of over-delivery, if the buyer accepts the excess goods, the payment value will be based on the price of the goods specified in the contract, or the parties may agree on a lower price.

If the parties have an agreement for the buyer or the buyer’s representative to inspect the goods before delivery, the seller must ensure that the buyer or the buyer’s representative has the conditions to conduct the inspection. For some special goods where extended inspection can affect the quality, the parties need to agree on shortening the inspection time or choose an appropriate inspection method. In addition, the seller can include additional terms to limit their liability if the buyer or the buyer’s representative waives the inspection at the time of delivery.

For issues related to goods quality, not all types of goods can be inspected by the parties at the time of delivery. Only after receiving the goods can the buyer determine whether they meet the agreed-upon quality. Therefore, the delivery terms need to exclude some cases where the buyer cannot check the quality of the goods, the handling mechanism for detecting substandard goods, and each party’s responsibility involves the cost of requesting a third party to re-inspect the product.

With defects in the goods that the buyer or the buyer’s representative knew or should have known but did not notify the seller within a reasonable time after inspecting the goods. In this case, according to regulations, the seller will not be responsible. On the contrary, the seller must be responsible for defects in the goods that the buyer or the buyer’s representative has inspected if the defects in the goods cannot be detected during inspection by normal means and the seller knew or should have known about those defects but did not notify the buyer.

Time of writing: 04/03/2024

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

• How to establish a Non-Governmental Fund and manage its activities
• Civil or Commercial Law Governing Contracts?
• Effectively managing probationary relationships in enterprises
• Notes when drafting delivery terms in sales contracts (Part 1)