Handling Goods That Do Not Conform to the Contract

Short answer: When delivered goods do not conform to the contract, the buyer may require the seller to remedy (repair, replace, deliver the shortfall) and may apply the following remedies: contractual penalties, damages, suspension of contract performance, or contract cancellation, depending on the severity of the breach. The legal basis is Articles 39–44 of the Commercial Law 2005.

Legal basis

• Article 39 of the Commercial Law 2005 — obligation to ensure conformity of goods with the contract;
• Articles 40–44 of the Commercial Law 2005 — liability and handling measures.

Cases of non-conforming goods

• Wrong type, design or quality versus the agreement or the sample goods;
• Wrong quantity; short or excess delivery not accepted;
• Wrong packaging specifications, labelling or origin as committed;
• Failure to meet announced applicable standards or mandatory technical regulations.

Remedies available to the buyer

1. Specific performance: require repair, replacement of goods, or delivery of the shortfall;
2. Contractual penalties: at the penalty level agreed in the contract;
3. Damages: including actual, direct losses and loss of expected profits;
4. Suspension of contract performance where the seller has not yet remedied the breach;
5. Contract cancellation where the breach is fundamental — the buyer cannot achieve the contract’s purpose.

The buyer’s obligations upon discovering a breach

• Inspect the goods as soon as possible;
• Notify the seller immediately of the non-conformity and require remedy;
• Preserve evidence: goods inspection records, photos, independent quality assessment results;
• Take measures to mitigate losses — losses that could have been mitigated but were not are not compensable.

Notes when drafting the contract

• The more detailed the goods description (standards, specifications, inspection methods), the easier it is to prove a breach;
• Agree clearly on the complaint time limit, penalty levels and damages caps;
• Agree on an independent assessment mechanism for quality disputes.

If you need to determine the appropriate approach for your specific situation, you should discuss it with a lawyer beforehand to have your file reviewed and a suitable solution advised.

For quick advice, you may contact a lawyer via 0966.475.966.

Related articles

• Goods sale contracts under the Commercial Law
• What is the maximum contractual penalty in commercial contracts?
• Damages for breach of commercial contracts