For those WG shipper members that export into Canada, membership with the Dispute Resolution Corporation (DRC) is a requirement. Guest columnist and DRC’s Director of Trading Assistance, Jaime Bustamante, provides his insights on the specific requirements to demonstrate when a commodity fails to meet contract terms at destination in Canada.

“DRC Trading Assistance staff continue to see the use of private inspections to demonstrate that a commodity fails to meet contract terms or DRC Good Arrival Guidelines. There is nothing wrong with sellers and buyers agreeing to have a private survey performed, but we would like to remind DRC members that, in the US and Canada, a federal inspection must be requested, unless otherwise agreed. DRC Good Inspection Guidelines specify that these federal inspection services are to be used unless they are not available, or CFIA/USDA cannot perform the service. 

If a private inspection is requested and the applicant fails to prove that it was discussed, understood, and agreed to, the private survey report may be of no value.  

DRC Trading Standards require that receivers request an inspection within eight (8) hours after the product arrives by land and within 24 working hours after the receiver is given notice of arrival by boat and rail. Even when the product arrives on a weekend or a holiday, buyers/receivers can proceed to request a federal inspection.

The inspections that carry the most weight are those performed by the CFIA (Canadian Food Inspection Agency) and the USDA (United States Department of Agriculture) government inspection agencies.

The DRC will accept inspections performed by independent private commercial inspection services or individuals if these services were agreed upon. Nevertheless, these services can be challenged if the private inspection report fails to conform with DRC Inspection Standards and Elements. The burden of proving that the private inspections report meets DRC Inspection Standards and Elements rests with the party requesting the private inspection.

Unless otherwise agreed to, we cannot stress enough the importance of requesting a federal inspection if you have received product in deteriorated condition. Contrary to private inspection services, the DRC will accept inspection certificates issued by the USDA and the CFIA at face value and a true image of the condition of the product upon arrival.”

If you have questions about Canadian or domestic requirements when proving a breach of contract, please do not hesitate to reach out to me at 949.885.4808 or [email protected].