My last blog concerning a recent PACA decision which I have again attached for your easy review (click) dealt with the importance of including specific language on invoices, as well as purchase orders and written sales confirmations on condition defects you wish to exclude from your sales contract. I received numerous telephone calls from sales and credit managers concerning specific language they want to include on their documents.
In the Decision and Order attached, the USDA destination inspection reflected 35% yellow brown discolored bud clusters. However, the restricted language on the invoice reflected “hollow stem, enlarged or open bud clusters, water soaked areas, bruising and discoloration are excluded and will be disallowed, from grade defects on broccoli.” While the normal rule of thumb allows for an exclusion of up to 33 percent on defects, because of the the restrictive contract language, the 35% yellow to brown discolored bud clusters were excluded from the inspection pursuant to the decision. . Additionally, not only was the exclusion for discoloration in play in this decision, but also the fact that the USDA inspection was not taken within 24 hours of delivery, and the inspection performed was therefore considered by the Hearing Officer to be too remote in time from the date of delivery to establish the breach of contract.
The Hearing Officer took in to consideration all three items:
1. The exclusion for discoloration
2. Shipper notification was outside twenty-four (24)) hours of delivery.
3. The buyer failed to secure a USDA inspection in a timely manner.
These are events that you should always look at when reviewing USDA inspection certificates. Not only can restrictive language on your invoice and passing exclude certain defects, but also look at the timeliness of the USDA inspection, the amount of the cartons inspected versus the number of cartons shipped, along with the temperatures reflected on the USDA inspection.
The seller should carefully consider all of these issues every time a USDA inspection is taken on product at destination.
If you, as a shipper, have a question concerning the timeliness of an inspection, number of cartons inspected, pulp temperatures or any other question concerning a USDA inspection, I encourage you to please contact me so all issues can be discussed and reviewed to determine whether or not a claim exist, I can be reached at (949) 885-2269.