Supplier Liability for Damaged Goods under Incoterms

Extract

[...] In addition, the client may bring an action for liability to obtain compensation equivalent to the damage suffered due to this partial delivery. This damage may include potential delays in their own production or in delivery to their customers, which may result in penalties for the client company, as well as impacts on product availability and stock breaks. This contractual liability action is provided for by Article 1231-1 of the Civil Code, which states: 'the debtor is condemned, if necessary, to pay damages and interest either due to the non-performance of the obligation or due to the delay in performance, if they do not justify that the performance was prevented by force majeure.' Finally, the client has the right to demand that the incomplete delivery be completed by a third-party supplier, at the expense of the original supplier, in order to receive the entire goods in the quantities initially agreed upon. [...]

[...] As the Incoterm DDP imposes most of the charges on the seller, it is difficult for the latter to be released from his responsibility in case of damage to the transported products, unless he can prove the occurrence of an event of force majeure that releases him from this responsibility, or demonstrate the liability of a third party. In the latter case, the seller may require the replacement of the products at the expense of that third party. The supplier may also refuse to replace the products and return to the customer a financial compensation that covers the damage suffered, if the repair in kind (replacement of the products at the expense of the suppliers) becomes excessively prejudicial to the supplier. [...]

[...] Delivery will take place in Courcouronnes, France. The Incoterm DAP is perfectly suited for transportation between countries of the same economic zone such as the European Union. Having decided to proceed with the partial shipment of the order due to packaging defects for part of the goods, the supplier would first be in breach of a contractual obligation to deliver the goods in the quantities requested by the client. It is therefore in violation of the terms of the contract concluded with the client as well as the order issued by the client and accepted by the supplier. [...]

[...] II/ Suppliers Regarding the supplier Wong : It is linked to the client by a contract that subjects the transport to the Incoterm CIF (Cost, Insurance and Freight) with the place of delivery at Le Havre. The Incoterm CIF mainly applies to maritime transport. According to the CIF, the seller bears the risks of the transported goods during transport, and the transfer of risks takes place at the time of loading of the goods. In the event that products have been damaged, it is necessary to determine the time when the damage occurred in order to establish the responsibility for the damage and to determine whether the supplier is required to replace the damaged products at their expense. [...]

[...] Concerning the supplier Li : It is bound to the customer by a contract that subjects the transport to the Incoterm DDP (Delivered Duty Paid) with the place of delivery in Marseille. The Incoterm DDP is suitable for multimodal transport. The Incoterm DDP places most of the burden on the seller, who is responsible for the transport and all associated risks and costs, starting from packaging and conditioning and loading or packaging at the factory or departure warehouse until the place of delivery agreed in the contract. This includes, unlike other Incoterms, customs formalities on import. [...]