School of International Economics Chapter 2: Quality of Goods

School of International Economics

Chapter 2: Quality of Chapter 2: Quality of GoodsGoods

商品的品质商品的品质


Quality of GoodsQuality of Goods

Refers to the outward appearance and the essential quality of the goods, such as shape, structure, colour, flavour as well as chemical composition, physical and mechanical property, biological feature, etc.


Quality of GoodsQuality of Goods

Importance of Quality of Goods

Value in use Price of the goods Sales of the goods Credit standing of the

manufacturer


A. Methods of Stipulating A. Methods of Stipulating Quality of the GoodsQuality of the Goods

2 Ways:

Sale by description Sale by sample


A. Methods of Stipulating A. Methods of Stipulating Quality of the Goods Quality of the Goods

1. Sale by description (凭说明买卖 )

Sale by specification, Grade or Standard Sale by F.A.Q. Sale by brand name or trade mark Sale by name of origin Sale by description


A. Methods of A. Methods of Stipulating Stipulating Quality of the Quality of the GoodsGoods

Sale by specification, Grade or Standard

( 凭规格 , 等级或标准买卖 )

The specification of the goods refers to certain

main indicators which indicate the quality of the goods, such as composition, content, purity, size, length, etc.

Example: Lithophone Zns content 28% min.




The grade of the goods refers to the classifications of the commodity of one kind which is indicated by words, numbers or

symbols. The classifications are usually decided by different qualities, weights, compositions, appearances, properties, etc.

Example: three-ply (三合板 ), first class




The standard refers to the specifications or grades which are stipulated and announced by the government or the chamber of commerce, etc.

Example: ISO9000 DIN



Sale by F.A.Q. (Fair Average Quality) ( 凭统货品质买卖 )

F.A.Q. refers to the average quality level of the export commodity within a certain period of time.

Used in agricultural and by-product market (农副产品 )

Stipulate the main specification indexes Example: Chinese Groundnut, 1994 crop, F.A.Q., Moisture (max.) 13% Admixture (max.) 5% Oil content (min.) 44%



Sale by brand name or trade mark ( 凭品牌 , 商标买卖 )

As to the goods whose quality is stable, reputation is sound and with which the customers are quite familiar, we may sell it by brand name or trade mark.

Example: Coca-Cola Nike



Sale by name of origin(凭产地名称买卖 )

There are some agriculture products and by-products whose origins are well known all over the world. As to these products, the origins may well indicate their qualities.

Example: Longkou Vermicelli



Sale by description (凭说明书买卖 ) The quality of some commodities can not

be simply indicated by quality indexes It is necessary to explain in detail the

structure, material, performance as well as method of operation.

If necessary, picture, photos, etc. must also be provided.

Example: such as technological instruments, electric machines, etc.



2. Sale by Sample (凭样品买卖 ) The sample refers to the article which

can be used to represent the quality of the whole lot.

Sale by the seller’s sample Sale by the buyer’s sample

Examples: handcraft articles, clothes or native products etc.



Sale by the seller’s sample (凭卖方样品买卖 )

The seller shall supply a representative sample which will possess the moderate quality among a large quantity of the physical goods

At the same time keep a duplicate sample, which shall be in quality as or on the whole as the same as the standard sample.



Sale by the buyer’s sample(凭买方样品买卖 )

Take into consideration the availability of the new material and the possibility of providing the processing technology.

Reproduce the buyer’s sample, i.e. counter sample, and send it back to the buyer as a type sample.

sale by the buyer’s sample sale by the seller’s counter sample.



Sale by the buyer’s sample(凭买方样品买卖 )

The two parties shall stipulate that in case the buyer’s sample results in any disputes of infringement of industrial property, the seller will have nothing to do with it.


B. Quality Clause in the B. Quality Clause in the Sales ContractSales Contract

The quality clause usually includes the specification, grade, standard or brand, etc. of the goods. In the case of sale by sample, it is

necessary to indicate the number of the sample and the date of despatch.

Example: Sample No. 612 Cloth Doll



As to the goods whose specifications and properties or performances are complicated, we shall adopt the following clauses: Quality as per sample No…and the technical

features indicated in the illustrations (图样 ) submitted by the seller.

Quality and technical data as per the seller’s catalogue No…

Quality and technical data to be in conformity with the attached technical agreement which forms an integral part of the contract.



In many cases, the quality indexes shall be stipulated flexibly and scientifically. Quality latitude: means the quality

indexes

of the goods delivered by the seller may

be controlled flexibly within a certain

latitude.



3 ways to stipulate the quality latitude: To stipulate a certain scope: the width of

the cotton cloth is 47/48 inches

To stipulate more or less clause: duck’s down content 18% (1% more or less)

To stipulate “max” or “min”: White Rice, Long-shaped, Broken Grains (max.) 25%

Admixture (max.) 1% Moisture (max.) 15%



Quality Tolerance: The quality tolerance is used in the trade of

industrial products, which means that the quality of the goods delivered by the seller is allowed to have certain differences within a certain range since such differences are usually unavoidable and commonly accepted as the usage of the same special trade.

Example: Length 100mm±2%, means 102mm and 98mm are all allowed in quality tolerance


C. Importance of QualityC. Importance of Quality

Importance of Quality (6 points) It involves the fundamental rights and

obligations of both parties. It determines the prices value of the

goods. It is the most important one of the many

factors that exerts a tremendous influence over the sales and prestige of the goods.


C. Importance of QualityC. Importance of Quality

Importance of Quality (6 points) The fine-quality goods always find themselves

in an advantageous position in the intense competition.

The well-known goods of high quality are always welcomed by the end-users or consumers.

If the quality of the goods is not in conformity with the contractual description, it is regarded as a breach of the contract and thus leads to disputes.

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School of International Economics Chapter 2: Quality of Goods