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Produce Pointers: Timing and trouble notice

The Problem: Timely “trouble notice” not provided to shipper.

The Key Point: Timely notice is a required element of a damages claim.

The Solution: Always provide notice of problems with a shipment as soon as possible.

Q. We are a produce distributor in Chicago. This summer we purchased a load of avocados from a shipper in Florida that arrived at our customer’s dock with excessive condition defects. Our customer unloaded the avocados and called us right away to notify us of the issue. That same day, the product was inspected, and the U.S. Department of Agriculture (USDA) certificate showed the product failed to make “good delivery.”

We did not notify the shipper of the problem until the product was sold because this shipper has a history of harassing our receivers and demanding the return of its product in these scenarios. The shipper is now demanding to be paid in full. Please advise.

A. While we understand why you might view the notice requirement as a technicality in light of the timely government inspection showing a breach, timely notice is a fundamental element of a damages claim.

Timely notice gives the interested parties an opportunity to investigate the facts for themselves.

For example, in this case, timely notice would have given the shipper the opportunity to review the inspection certificate and call for an appeal inspection if it had some reason to doubt the results.

By delaying notice until after the product was sold, the shipper was improperly denied this opportunity.

We suggest that trouble notice always be given as soon as possible. As a best practice we would advise informing the shipper when USDA or Canadian Food Inspection Agency (CFIA) inspections are called for, then making sure the shipper is sent a copy of the inspection certificate as soon as it’s available.

Cliff Sieloff

Finally, it’s also important to understand that shippers do not have the option of unilaterally pulling their product out of a receiver’s hands after receiving notice of a potential claim. When defective product arrives, the buyer is entitled, at its sole discretion, to either reject or accept the shipment under protest.

Consequently, there is really no reason not to provide shippers with timely trouble notices.

Cliff Sieloff is a Claims Analyst for Blue Book Services Inc.