How to return money for delivered defective or incomplete goods

The largest number of economic disputes are usually related to supply agreements (purchase and sale agreements). Disputes arise not only in relation to timely payment for the goods delivered, but also concerning the quantity and quality of the goods delivered.

Today we will tell you what to do if your counterparty has provided you with poor quality goods or incomplete delivery.

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How to prove that the product delivered is faulty or incomplete?

According to the provisions of the Economic Code of Ukraine, the quality of the goods delivered to you under the agreement shall comply with: 

• The established standards, specifications, other technical documentation that sets requirements for the quality of this particular type of product; 
• Samples (standards) of this product;
• Requirements for the quality of the goods specified in the agreement. 

It means that if the agreement contains a drawing of the goods, for example a milling cutter, vice clamps or cutter, the Supplier must not deviate from the drawing when making the goods. That is, the goods must fully comply with all the specified characteristics. The Buyer has the right to refuse the goods which do not correspond to the drawing, as well as refuse to pay for them.

Thus, the faulty goods are the goods with defects or essential defects.

Algorithm of actions in case of delivery of the faulty goods:

1. Suspend acceptance of goods and immediately notify the Supplier of refusal to accept such goods; 
2. A report must be drawn up stating the actual quantity of the goods inspected and the nature of the defects detected during acceptance (specifically for each item). Such report may be drawn up in any form, which may lead to certain errors. Be careful during its preparation, or consult with a lawyer; 
3. The process of acceptance of goods shall be carried out in the presence of the Supplier, after which the Supplier and the Buyer shall draw up a bilateral Defect Report.

How will this algorithm of actions help you?

On the basis of the Report and the fact of delivery of defective goods, you have the right to demand from the Supplier: 

• To reduce the price of the product proportionally; 
• To eliminate defects in the product at no cost; 
• Full compensation for the costs incurred to eliminate the shortcomings of the goods, if you do it yourself. 
• If the defects of the goods are essential, i.e. they cannot be eliminated - you can demand replacement of the goods or refund of the money that was paid for the goods.

Algorithm of actions in case of incomplete delivery:

1. Again, you need to stop accepting the goods immediately;
2. Then you need to involve the Supplier and further acceptance of the goods must be carried out only in his/her presence;  
3. Upon receipt of the goods, a report on the quantity of the goods is drawn up, which must clearly indicate how much and what goods are missing.

On the basis of this report and the fact of the incomplete delivery, you are entitled to:

• Demand the missing goods; 
• Return incomplete goods to the Supplier and demand refund.

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Delivery dispute resolution process

How to resolve the conflict if the Supplier refuses to send its representative to formalize the acceptance of faulty goods and insists that it delivered quality goods that meet all the characteristics? 

There are two possible ways to resolve the dispute.

Pre-trial settlement of the dispute. In order to maintain trusting partnership relations and of course to quickly resolve the dispute (after all, even the best lawyer can not tell you the exact period of the court proceedings), many entrepreneurs seek to resolve the conflict in the pre-trial order. 

For this purpose, you need to send a claim to the Supplier with a detailed description of the detected defects or missing items. 

Please note! The Supplier has the right to consider your claim within at least one calendar month from the date of its receipt, which can greatly delay the entire process and prevent you from doing business in general.

On the other hand, properly conducted negotiations and a well-prepared claim can help resolve the dispute faster than in court.

Settlement of legal disputes before state courts (litigation). In those cases where the conflict cannot be resolved peacefully, you can do without filing a claim and immediately apply to the commercial court.  

In this situation, of course, it is important to make a correct statement of claim. It may contain: 

• A request for replacement of the faulty goods; 
• A request for the return of money already paid for the defective goods or undelivered items. 

Please note! You must provide evidence confirming that you were supplied with faulty goods. For example, such proof may be an expert opinion drawn up based on the results of the goods quality examination. 

It is also important not only to prescribe the basic demands in a claim, but also the demands for the imposition of penalties. 

If you want to protect your business and successfully return the money for faulty or incomplete goods, don’t hesitate to call us. We will tell you what to do and help you to defend your right.