Two months after the goods arrived, what came was not the balance but a deduction sheet: 15% for quality, 5% for late delivery. Reaching for the contract then, hunting for inspection records then, is already too late — eighty percent of a trade dispute is decided before the ship sails.
The three roots of disputes
Twenty-plus years of watching arguments circle back to the same three:
- Specification drift: samples diverge from production, the buyer changes specs verbally and nothing is written, the two sides hold different versions of the spec sheet. When the fight starts, nobody can produce the “which version governs” line
- Inspection timing never pinned: pre-shipment or on-arrival? Inspected by whom, against which version, with how many days to object? Unwritten, a buyer can claim non-conformity three months after receipt and you lack even a baseline to argue from
- Transit-risk boundaries unclear: damage at sea is whose? The trade term’s risk-transfer point decides — FOB passes it at the rail, DDP holds it to the door. Choose a term without buying the matching insurance and the hole is exactly there
The dispute-resolution clauses a contract needs
Three terms in plain words. Governing law: which country’s law interprets the contract — omit it and the first fight is about which law governs the fight. Jurisdiction and seat: where the battle happens; “buyer’s state courts” means an away game where legal fees defeat you first. Arbitration: a neutral institution, final on one award, generally faster than court and better travelled internationally for enforcement — the reason export contracts mostly pick it. If a Taiwan seat is unattainable, fight for a neutral one — Singapore, Hong Kong — and write the institution’s name and the language of proceedings into the clause.
Buyer deductions: chargebacks and setoffs
US buyers rarely sue; they deduct from payables — retail contracts even codify it (which clauses bite). Three moves: constrain the procedure contractually (written notice, evidence attached, an objection window); on receiving a deduction sheet, demand the evidence and reconcile line by line before conceding anything; and when accepting the deducted remainder, note in writing that receipt does not constitute acceptance of the deduction.
The evidence chain: you already produce it — file it
Disputes are won on documents, and every shipment generates them anyway: order confirmations and spec sheets (with versions and dates), pre-shipment inspection reports, stuffing photos and seal numbers, the full customs set (the fields that leak), delivery receipts. Filed per shipment and retained for years, the cost is near zero — reconstructed after the fact, it has a very different price.
The logistics slice of that chain — stuffing records, bills of lading, arrival condition — SKYCARGO INC keeps for clients as routine in every import-export operation. Talk through your trade terms with us; rates on request. (Personal shipments: Shiptw.)
General information only, not legal advice; clause design and major disputes belong with counsel versed in international trade.
