By Sun Jin(Marlow), Chinese attorney at Law, All rights reserved, republishing this article please indicate author and source of this article.

In international trade law practice, one of the most-often-seen types of disputes is quality dispute. The foreign importers bought some cargos from China, with good or very good price, however, after the importer (i. e. buyer, same below) received the cargos unloaded from the containers, sometimes they found that the cargo’s quality is really inferior, than the sent samples, or specifications in the sales/purchase agreement. And as usual, both parties may carry on business negotiations, and may finally reach one solution on it. But if the negotiation fails, and the buyer has to transfer the dispute to his lawyer in China, in most situations, this type of dispute will become a difficult case to the buyer’s lawyers.

According to Proof Burden rule of Civil Procedure Law of P. R. China, "these who claim must burden the obligation to evidence the claim (i. e. defects in this type of case)". So the target of buyer’s evidence system will be the fact that the cargos from sellers are defective. In fact this contains two relevant facts, first is that the cargos are from the seller, second is that the cargos are defective. And we must evidence these two facts, and also evidence it that these two facts are relevant, which will become quite tricky in some situations. A common doing will be, the buyer picked up some sample from the bought cargos, and have them inspected or assayed by an independent third party, and the third party will issue one report, with conclusion that the cargos are not in conformity with some specifications or standards, hence, in easy word, are defective.

However, the seller's lawyer can come to the key point directly, the buyer said my sold cargos are defective with one inspection report, the problem is, how can you evidence it, that the inspected or assayed picked samples are from the cargos of mine? This is a real hard question, possibility can surely exist that you picked up the sample from cargos of somebody else which you may bought from another manufacturer or exporter. Sometimes the third party of inspection company will write something in the report like the cargos from which the samples are picked up from cargos of this very supplier (i. e. seller, same below) (indicates the name of this very supplier in the report), but of course the inspection company can only know this according to the advice and information of the buyer (i.e. importer, same below), while it's nearly impossible for the inspection company to see it via their own eyes, after all, the container had already opened and unloaded. So here it’s really hard to distinguish it that the cargos from which the sample is picked up are this very seller’s cargos, because you did not record the whole procedure of opening the container at same time picking up some samples, which is not practical, because the defectiveness could not be found unless some time after the container is opened and the cargo is unloaded, before this, very few guys would be able to know it that the cargos are defective.

So this is the first big headache, but not all, while the quality standard will be another problem. We had ever studied lots of similar cases, i.e. Court judgements of some quality disputes litigation cases; while in many similar cases, the seller and the buyer did not specify the quality standard at all. Many of them close the deal merely according to samples, and a proforma invoice. The buyer told the seller, I want this product with this photo, do you have it please? The seller said yes we have it, and the couriered some samples to the buyer, the buyer received the sample and confirmed it, said ok you can go ahead with manufacturing of this product, and please manufacture it exactly according to the sample. We may call this type of deal “the deal according to sample”, and we here of course had the quality standard, that is the quality will be ascertained by the quality of the sample sent. However, the problem is, we see a similar problem to above first problem. After the package of the sample is opened, then it will be hard to distinguish it to be the sample from this very supplier any more. While on court, it will be the buyer’s Proof Burden to evidence it that the sample is the sample confirmed by both parties, which is impossible at all. The seller need not deny it at all, they can just say, I do not know whether this is the sample that I sent. So most “deals according to sample” are meaningful over business only, but will be meaningless while in litigation cases. The right way to close a deal according to samples, will be both parties’ sealing some samples together, or specify the specifications adequately detailed in both parties’ communications and agreement. Unfortunate, 90% of transnational merchants did or do not do it.

Regarding the reasons of this problem, first is the rule of burden of proof. If both parties must disclose all facts and paperworks to court, then it will be another story, and we may not have this problem. Second reason is relating to the first one, the burden of proof rule, sometimes enables parties of the case can play games, this does not mean that the parties lies, but they can refuse to recognize some facts, as this is the burden of proof of opponent party.

(To be continued …..)