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Distressed Produce and Low Returns

Returns on product that failed to make good arrival.
Produce Pointers

Based on the documentation presented, which shows that more than 60 percent of the product was free from defects, and which includes a statement from a third-party inspection stating that the papayas should be repacked, we must conclude that your customer has not established this product had no commercial value.

When a buyer cannot show (with a detailed accounting) that it resold distressed product in a “prompt and proper” manner, the value of the distressed product may be imputed based on the percentage of defects shown on the inspection certificate. Applied here, damages would equal approximately 40 percent of the destination market value of papayas in good condition. This amount, plus inspection fees, could then be properly deducted from your invoice to arrive at the amount your customer would owe you for this fruit.

Your questions? Yes, send them in. Legal answers? No, industry knowledgeable answers. If you have questions or would like further information, email

Doug Nelson is vice president of the Special Services department at Blue Book Services. Nelson previously worked as an investigator for the U.S. Department of Agriculture and as an attorney specializing in commercial litigation.