1. Company A (Chinese company) signed a contract with Company B (U.S.company) fo
ID: 1109614 • Letter: 1
Question
1. Company A (Chinese company) signed a contract with Company B (U.S.company) for exporting of ceramic products. The contract stipulated the reinspection time is within 60 days after arriving of the goods at the port of destination. Company B reinspected the goods after they received it and raised no objection. One year later, Company B send a fax to Company A and stated: all the ceramics appear " enamel cleavage" and has to be sold devalued, Company A should make a compensation equal to 60% of the contract price. After receiving the fax, Company A checked the duplicate sample and found cleavage" on ceramics too. "enamel Question: Should Company A make the compensation to Company B? Why?Explanation / Answer
Answer : From my point of view, Company A should not be liable to pay compensation to company B because as per contract the goods inspected within 60 days after arriving the port . At that time the company B said there is no objection related to cermicas. After one year they complaint about the defect but it is now too late so according to law the company A is not liable to pay compensation.
But if in long run scanerio the company A want to export company B than they paid compensation as there problem is genuine. As per law there is no complusory for company A to pay compensation to company B.
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