In the absence of a special agreement between the Shipper and the Retailer, defects at this level are not sufficient to show that the Shipper, as an FOB seller, failed to ship the grapes in suitable shipping condition or otherwise failed to comply with industry standards for grapes sold U.S. No. 1 Table.
While it is possible the sales agreement between the Shipper and the Retailer provided a stricter standard (i.e., more restrictive than U.S. No. 1 Table) the grapes failed to meet, no proof that the parties agreed to a stricter standard was provided. If stricter product specifications were agreed to between the Shipper and the Retailer, then we would expect the Retailer to disclose this to the Truck Broker as basic information needed to fairly allocate responsibility between the Shipper and the Truck Broker following the Retailer’s rejection of the product.
Without proof of a specific standard that the Shipper’s grapes failed to meet, the Truck Broker relies instead on the fact that ABC’s grapes were received to suggest the transportation service must have met the Retailer’s standards, and therefore the quality (and condition) of the Shipper’s grapes must have been the cause of the rejection.
Although we follow the Truck Broker’s reasoning on this point, we are always reluctant to infer too much from a receiver’s decision to reject only a portion of a truckload. It is, of course, likely the other product on the trailer (the product that was accepted) was better product than the product that was rejected. But produce sellers are not obligated to ship the best product on the truck; they are only obligated to provide product that complies with the sales agreement entered into with the buyer.
Furthermore, it is possible that factors unrelated to the condition of the product entered into the decision. For example, perhaps the product that was accepted (whether distinguished by brand or pack or otherwise) was perceived to be in greater demand at the time, or, perhaps both lots were in very similar condition, but the buyer believed it needed at least some grapes on hand, and so it made a decision to reject some, but not all, the grapes on the truck.
All this to say, especially in light of the USDA inspection certificate showing the Shipper’s product met the U.S. No. 1 Table grade standard, we do not believe the Truck Broker can point to the Retailer’s acceptance of ABC’s grapes as proof that the Seller’s grapes failed to comply with the sales contract, or as conclusive evidence that its transportation service complied with its agreement with the Retailer.
That said, however, it is not at all clear that the transportation service provided by the Truck Broker (and its carrier) failed to comply with industry standards or its agreement with the Retailer. First, we believe it is appropriate to give at least some weight to the Retailer’s receipt of ABC’s grapes as evidence that the transportation service provided by the Truck Broker complied with its agreement with the retailer.
