Legal Updates

One cannot contend that goods were faulty if the complaint was not raised immediately upon discovering it

March 11, 2019

A distributor of baby bottles and related products contracted with a factory to produce the products for it. At some point the distributor stopped paying, contending that it was offsetting damage caused by defective goods supplied over the years, and the supplier refused to continue supplying the goods. As a result, the distributor terminated the agreement and refused to pay for goods already manufactured but not yet picked up by the distributor.
The Court accepted the claim in full. Under law, a purchaser must check the goods immediately after receipt thereof and inform the seller of any defect immediately after the examination date or immediately after the discovery of the defect, whichever is earlier. Here the distributor contended a large amount of defective goods received over three years, but the contention arose only together with the refusal to pay and therefore can not be relied upon. In a reciprocal contract, in which there is a commitment to provide services or products in return for payment, the obligations are intertwined and the factory did not have to supply the goods without receiving payment, and therefore the termination of the agreement due to the lack of supply was not justified.