Successfully Solved Exporting Mask International Dispute

An American client sought legal help from our law firm and told us that it had found a supplier of masks in China. Under the condition of paying 100% advance payment according to the order, the Chinese supplier didn’t deliver the goods on time as agreed and repeatedly postponed the delivery date. Then, the American company doubted the supplier’s ability, and, they could not bear the economic losses and reputation impact caused by the late delivery then serious breach of contract with their end customers.

After analyzing the case, our lawyer held that the supplier should supply goods in time according to the contract after receiving the payment, otherwise it would constitute a breach of contract. The law firm issued a letter of attorney to the supplier to inform it about the serious legal consequences of the delay in breach of contract. The supplier said that the goods were ready, but had transportation problem and could not be delivered in time. Our lawyer called the freight forwarder in charge of cargo transportation to ask for information. The freight forwarder said that under the influence of the epidemic situation, the current air freight transport capacity was still at a low level, and the overall international air transport price was high. And a large number of flights to suspend operations, enterprises shut down, and some countries’ import policies changed, resulting in a large number of cargo suspended. In addition, the government regulated policy of priority delivery of medical materials. The masks purchased by American buyer were non-medical materials, so the products were delayed.

Our lawyer informed the supplier of the seriousness of the performance of the contract, and asked the freight forwarder to arrange the transportation in time, so as to prevent the breach of contract from causing serious economic losses. After communication between the parties, the supplier and the forwarder actively fulfilled the contract and finally exported the goods to the America in time.

At present, there are two kinds of disputes over exporting masks: one is caused by logistics; the other is caused by the quality of goods.

Most of the disputes caused by logistics are that the logistics company can not deliver the products to the destination in time as agreed nor in the agreed manner. Logistics costs soared during the epidemic period. The delay reasons of logistics companies was partly due to the large volume of goods transported during the epidemic period, the backlog of goods and the influence of customs policies. More reasons are that the logistics companies used low-cost transportation modes, such as when supposed to use air transportation but actually use ways of sea transportation or railway transportation. For example, a logistics company promised to adopt door-to-door service by air within a week. As a result, it took a month to use sea transportation. Logistics delay directly leads to the price reduction and even unsalable, buy at a high price but sell at a low price, causing serious economic losses to the buyer. Sellers and buyers generally do not sign a contract with the logistics company. They only agree orally and without liability of breach of contract, which makes it more difficult for buyers to protect their rights. Even under The Convention On The Unification Of Certain Rules For International Air Transport, the compensation that buyers can get is very low if the goods are damaged or lost.

The disputes caused by the quality of goods are very common, accounting for a large proportion in international trade disputes. For example, the seller quoted prices for the products of famous companies, but the goods actually delivered were inferior products from small workshops. Many sellers are companies set up in early 2020 with little registered capital. In fact, they are shell companies, and their registered addresses do not exist. Also there are other situations that the factory provides false qualifications, leading to confiscation by the customs, or unable to sell.