Buyer's Rights to Inspect and Reject Goods: Defects and Latent Defects Explained

The Buyer shall have the right to inspect the Goods on delivery and within [7] days of delivery shall give notice in writing to the Seller of any claim or rejection on account of any alleged defect in the Goods or failure to comply with the Specification. If the Buyer shall fail to give such notice, the Goods shall be deemed to have been accepted in every respect. Any Goods rejected following inspection shall be returned to the Seller at the Seller's risk and expense. The Seller shall at its option repair or replace rejected Goods or refund the Price in respect of the rejected Goods. The Buyer's rights of inspection and rejection shall not apply to latent defects, being defects which are not discoverable upon reasonable inspection. The Buyer shall give the Seller written notice of any latent defects in the Goods within a reasonable period of time following discovery of such latent defect. The Seller's liability for latent defects shall be limited to repairing or replacing defective Goods or refunding the Price paid for such Goods.

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Explanation

Here is a plain English explanation of the Inspection and Acceptance clause:

- The buyer has the right to inspect the goods when they are delivered.

- The buyer then has 7 days after delivery to notify the seller in writing if they want to reject or make a claim about the goods. This may be for reasons like faulty goods or goods that don't match what was agreed to.

- If the buyer does not provide written notice of rejection or claims within 7 days, the goods are automatically considered accepted by the buyer in every way.

- If the buyer does reject the goods after inspection, they must return the rejected goods to the seller at the seller's expense and risk.

- If goods are rejected, the seller has the option to either repair or replace them, or refund the price paid by the buyer for those goods.

- The buyer's inspection and rejection rights do not apply to hidden defects that are not apparent upon reasonable inspection at delivery.

- For hidden defects discovered later, the buyer must still notify the seller in writing within a reasonable timeframe after discovery.

- For hidden defects, the seller's liability is limited to repair, replacement or refund as the sole remedies.

History of the clause (for the geeks)

The concept of allowing inspection and acceptance of purchased goods has ancient origins, with proofs of delivery and quality control practices dating back thousands of years.

Roman law had elements allowing buyers to reject defective goods.

In the Middle Ages, European guild systems often oversaw standards and inspection processes for goods. For example, the Worshipful Company of Weavers in London inspected textiles for quality.

Early English common law focused on goods fitting agreed upon specifications. Over time, inspection rights and acceptance clauses became embedded in British commercial arrangements. 19th century English cases like Mody v Gregson established damages for buyers accepting defective goods.

The modern inspection and acceptance clause has roots in the 1893 Sale of Goods Act in the UK. This codified buyer rights to reject goods through prompt inspection and notice. It also imposed implied merchantability warranties, making inspection periods crucial.

Inspection clauses grew more defined in 20th century commercial legal practice in England. Clear acceptance windows, notice methods, return transport obligations, and remedies became standard provisions to balance buyer and seller rights.

Today, carefully crafted inspection periods and processes are seen as indispensable to English commercial contracts for the sale of goods. They uphold standards while providing certainty for transacting parties on both sides.