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How do I get compensation if goods are not to the specifications of the signed contract? What can I do if the supplier passes the claim to his insurers and both parties are refusing to reimburse our payment for a future shipment that has been cancelled?

Posted: 2013-04-29

Full Question

How can I get compensation for moldy, smelly, rotten dry beans, condemned by Port health authority, received in Africa from China and paid fully? The goods are not to the specs of the signed sales contract. The supplier is trying to pass the compensation claim to his insurers, although the insurance contract is only a maritime cover. Also, they are refusing to reimburse our advance payment for future shipments that we have cancelled. They are stating that Chinese exchange control does not allow them monetary reimbursement at all.

Answer

Based on the situation as you describe it, a China lawyer could argue that the product was not fit for function and the supplier should provide compensation.

By the way, "we can't pay you because of current regulations" is a common stall tactic. Tell them you will accept RMB in Hong Kong and convert it to your currency yourself.

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