Buyer’s Right of Rejection in International Trade
International trade law is the mixture of domestic and national law and public international law that applies to transactions for goods or services that cross national boundaries. Certain multilateral treaties play an important role in this field- notably the Convention for the International sales of goods and several dealing with dispute resolution and the enforcement of resulting adjudications.
The basic concept underlying all international transactions is that foreign markets are extensions of domestic markets, in the sense that goods and services produced domestically, and whose quality is reflected in the strengths of the supply and demand curves, can also be sold internationally. This market-extension concept allows for the developing of markets in different countries, regardless of the domestic market conditions. It forms the basis for industries strictly oriented toward export, and also for multinational corporations, a special case of domestic-cum-export-oriented businesses.
The Buyer
The significant changes in economics and politics are brought about by large numbers of people changing their behavior (Rich, 1992). Each of us is different from the other-different in appearance, in genetic composition, in the degree of our sensitivity and ability to comprehend and contribute. Our responses to the same stimuli differ, and this accounts for the wide diversification in tastes, interests, hobbies, and professions. Personal psychology is the only scientific field that deals with the individual and his or her likes, dislikes, tastes.
Demand and supply curves of exports and imports must not be mixed up with the underlying domestic demand and supply curves for the commodities involved (Sauve and Stern, 2000). For example, the import demand curve, even for a consumer good is not a “pure,” consumer demand curve, but is the excess of home demand over home supply. It is clear that whenever an imported commodity is also produced at home and an exported commodity also consumed at home, the import demand and import supply will be much more elastic than the home demand and home supply, respectively.
An orderly commercial community requires both the knowledge that with some degree of certainty transactions agreed upon will run to completion and the assurance that the rights of the parties to such transactions will be fairly protected in any dispute. Yet sometimes the attainment of a high degree of certainty in the performance of transactions conflicts with the balancing of the parties’ rights. The more accurately a vendor can say in advance of a delivery that the goods will not come back to him or the more confident a buyer feels in his ability to rid himself of unwanted goods, the less the rights of the other party are taken into account. On the other hand, the more finely tuned the dispute resolution mechanism is to the balancing of rights, the less predictable is the outcome of any transaction, especially where the parties are not legally sophisticated.
Therefore, the buyer and the seller should know their legal rights in the transactions they are making. It is very essential for them to do so in order to have an organized communication and to avoid conflict between the two parties. The buyers have most of the rights to choose what they like but the sellers also have other rights over the buyers.
Buyer’s Right of Rejection
In purchasing a certain good or service the buyer and the seller have to bear in mind that there are conditions in purchasing. In the case of goods delivered by the Seller not conforming with the Contract whether by reason of not being of quality, or the quantity, or fit for the purpose stipulated, the Buyer shall have the right to reject such goods within a reasonable time of their delivery and to purchase equivalents elsewhere without prejudice to any other right which the Buyer may have against the Seller. Before exercising the said right to purchase elsewhere, the Buyer shall give the Seller reasonable opportunity to replace rejected goods with goods which conform to the contract.
Certain conditions on the rejection of goods should be followed. When the buyer receives the good as unexamined, the buyer’s right to subsequently reject them if they do not comply with the specifications and claims for shortage, shall not be prejudiced. When goods are rejected, they will be returned at the seller’s risk and expense. The making of payment shall not prejudice the buyer’s right of rejection.
Manner and Effect of Rightful Rejection
The manner and effects of rightful rejection is according to Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967. The following are included in the act (Georgia Law Review, 1979).
(a) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.
(b) Subject to the provisions of the two following sections on rejected goods,
(1) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and
(2) if the buyer has before rejection taken physical possession of goods in which he does not have a security interest, he is under a duty after rejection to hold them with reasonable care at the seller’s disposition for a time sufficient to permit the seller to remove them; but
(3) the buyer has no further obligations with regard to goods rightfully rejected.
(c) The seller’s rights with respect to goods wrongfully rejected are governed by the provisions of this chapter on Seller’s remedies in general.
Acceptance of good occurs only when the buyer after a reasonable opportunity to inspect the goods, signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity. When the buyer fails to make rejections, but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them. If the buyer does any act inconsistent with the seller’s ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him. Acceptance of a part of any commercial unit is acceptance of that entire unit.
Conclusion
We are in the midst of unprecedented global trade (Ivankovich, 1983). It is very important that around the world, sellers and consumers have the right attitude towards one another. The buyer’s right of rejection should be of due respect from the sellers themselves. The buyers have the right to choose and the right to reject. However, the sellers should not be blamed for this matter. There are products and services that can be acceptable in a place but not in the other. This is due to consumer preference.
The law on the right of rejection has been used for quite a long time. International trade should utilize it and use it in a sense that it would benefit both the seller and the buyer. The buyer will achieve what deserves to be the good or service for him, while the seller must accept rejected goods or services and take it positively. This may serve as a guide on what is to be done for improvements and developments of the product or goods.
A product that is acceptable to the whole world can be a very competitive product, meeting all the needed qualifications and is acceptable to the buyers no matter who they were. This should be the aim of our international traders.
Sources:
Ivankovich, Ivan F. (1983). Consumer Products in New Brunswick- Its Scope and Warranties. University of New Brunswick Law Journal 32(123).
Rich, David Z. (1992). The Economic of international Trade: An Independent View. New York: Quorum Books.
Sauve, Pierre and Robert Stern (2000). Gats 2000: New Direction in Service Trade Libleralization. Boston: Brookings Institution.
Georgia Law Review (1979) 805-846
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