Iceberg lettuce – not so ordinary

Iceberg or head lettuce is not typically thought of as exceptional.

And yet, when it comes to industry trading customs and rules, iceberg lettuce is different in two respects:

First, iceberg lettuce is the only commodity for which the PACA regulations provide a “good delivery” standard as opposed to a “good arrival” guideline. The good delivery provision provides— If the contract does not specify a U.S. grade or percentage of condition defects, the lettuce at destination may contain a maximum of 15 percent, by count, of the heads in any lot which are damaged by condition defects, including therein not more than 9 percent serious damage of which not more than 5 percent may be decay affecting any portion of the head exclusive of wrapper leaves. (7 C.F.R. 46.44)

On the surface this 15-9-5 standard doesn’t look much different than the five-day good arrival guideline for other commodities. For example, the good arrival guideline for romaine is 15-8-4, following a similar pattern.

The guideline for romaine, however, is derived from PACA precedent and is more flexible than the standard provided for lettuce. For instance, the guideline for romaine provides that product arriving on the third day, after normal transportation, should have no more than 13 percent average defects, 7 percent serious defects, and 3 percent decay (or 13-7-3), with additional defects provided for the fourth (14-8-4) and fifth days (15-8-4).

No such flexibility applies where lettuce is concerned. By default, the regulation is applied strictly whether the product arrives on the third day or the fifth. This is potentially disappointing to buyers who are less than 5 days from shipping point, and yet must accept lettuce with 15 percent average defects without recourse against the seller.

The second way iceberg lettuce is different also has the potential to disappoint unwary buyers. For generations now “bruising” and “discoloration from bruising” has routinely been excluded from sales contracts. This exclusion is so common and widely recognized that buyers can expect to see boilerplate language excluding these defects in the seller’s paperwork.

(See The Garin Company v. Nash-Decamp Company, 44 Agric. Dec. 1283 (1985) recognizing the exclusion but also suggesting that product with 33 percent or more of an excluded defect at loading may nonetheless constitute a breach of contract).

Consequently, unlike a buyer of romaine, a buyer of iceberg lettuce holding a timely inspection certificate showing 25 percent average defects will need to deduct any bruising or discoloration from bruising from this total before concluding it has established a breach of the sales agreement by the seller.

Doug Nelson is Vice President of Trading Assistance for Blue Book Services Inc.