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  • QA 207
    Question:
    Can a coffee be rejected even if the quality was formally certified at origin?
    Background:
    A recent delivery was rejected by an inland buyer on the ground that 'the cup turns'. What is meant by this? Is it any reason to reject a coffee? Even when we have an official quality control certificate from origin stating the quality was as per the standard in question?
    Asked by:
    Anonymous
    Answer:

    The brief answer is yes, unless the contract specifically stated that quality as certified at shipment would be final. But such a clause would be extremely unusual and most unlikely to be accepted by buyers abroad. More about this later.

    First, what is a 'turning' cup? We assume this to indicate that at the time of cupping there may have been some undefined uncertainty about the quality. This may have given rise to allowing the cups to cool down and re-tasting them later at which time the earlier uncertainty became, well… a certainty. It is not unusual for cup quality to change as the brew cools down - this can cause certain nuances to weaken and others to strengthen. A buyer who is concerned about this possibility may follow this procedure as a matter of course as part of the quality control sequence. If negative or unacceptable taste nuances become more obvious then one might decide the coffee is not suitable.

    Second, is this ground for rejection? This depends on the buyer's perception of acceptable quality so we cannot comment on this aspect. It is more important therefore to ask whether a delivery can be rejected on the grounds of quality?

    • If the contract states that acceptance was 'subject to approval of the quality on delivery' or some such clause, then the answer is yes. One might question whether the reasons given for a particular rejection are really justified but, the clause is clear.
    • On the other hand, if such a clause is not included and assuming the contract makes reference to either the US's GCA Standard Contract or the European Contract for Coffee, then the answer would be no. Both these Standard Forms of Contract provide that all disputes shall be resolved through arbitration. *

    Finally, the official quality certificate… As said earlier, for this to be the deciding factor the contract would have to state words to the effect that 'quality as certified at time of shipment shall be final'. Frankly, we cannot see any well-informed coffee buyer agreeing to such a stipulation. Quality is of such importance to the end-user, the roaster, that roasters will always make their own decisions as to whether a coffee is acceptable or not.  Irrespective of whether an official quality certificate was supplied or not.

    How a decision to reject a coffee is then executed will be informed by the underlying contractual basis we have referred to above, and the arrangements they may have in place with the supplier in question.  For example, they may have an understanding or even an agreement that the supplier will replace any rejected parcels - this is one of the major strengths of the large trade houses that dominate the international trade. They are able to do so and this suits the roaster. After all, a rejected parcel leaves a gap in the roaster's supply line. **

    Therefore, unless specifically stated in the contract no quality certificate can supersede the buyer's right to decide for himself whether a delivery is acceptable or not. And take action in accordance with the terms of the underlying Standard Form of Contract. ***

    * The international coffee trade uses these Standard Forms of Contract to standardise the general terms and conditions of trade to avoid that each and every aspect of each and every transaction has to be separately agreed before a contract can be concluded. The contracts lay down standard conditions for both the trade in green coffee and the settlement of disputes - the vast majority of the international trade in green coffee is based on one or the other of these Standard Contracts. For a full review see Chapter 4 of the Guide - also visit www.ecf-coffee.org for the European Contract for Coffee issued by the European Coffee Federation - ECF, and www.green-coffee-assoc.org for the contracts issued by the Green Coffee Association of New York - GCA.

    ** A contract that makes provision for rejection. For example, an importer or a trade house sells to a roaster  'delivered roasting plant' with the proviso that only an agreed quality can be delivered. If rejected the seller will substitute and dispose of the rejected parcel elsewhere. This is common in the mainstream industry. In the specialty industry roasters sometimes reject deliveries on unclear grounds but importers replace them in order to retain the client

    *** Of course one would expect a buyer to be specific about the grounds for rejecting a parcel. And, if a supplier is not satisfied that there is any merit in that rejection, for example suspecting that a lower market rather than 'quality' may be more of a reason, then the option of arbitration is open to him.

    Posted 14 November 2008

    Related chapter(s):
    Related Q & A:
    Q&A 104, 180, 195