Advice and mediation in disputes regarding direct trade26 March 2020
At the moment we unfortunately see that orders in direct trading do not always go through. It sometimes happens that the two trading parties do not have the same picture of the agreement made. What should I deliver? or what should I take?
What should you do in this case?
- Contact the counterparty to discuss the situation.
- Make a clear record of the damage you suffer as a result of the cancelled orders, this is important for a claim.
Can't get out of it? OR Do you need advice/mediation?
Would you like more information? Or have you given up?
Read here the answers to the five most frequently asked questions (FAQs) about disputes with buyers, growers or other customers of Royal FloraHolland.
1. What to do if the exporter stops ordering?
If you have made clear agreements about an order to be delivered and the exporter does not order as agreed, it is important to find out what is going on. Call the buyer and discuss with him what is going on. The Corona virus is currently having a major effect on the international floriculture trade. In many cases the exporter invokes force majeure.
The General Terms and Conditions for Connect apply to the direct
trade that takes place and is settled via Royal FloraHolland.
Article 10 of the General Terms and Conditions for Connect explains
when the grower or the buyer can invoke force majeure and thereby
evade his obligation to deliver or purchase.
In that case there must be a case of force majeure:
- Reasonably unforeseeable circumstances such as fire, government measures or an organized roadblock;
- that fall outside the direct influence of the buyer, are not due to the buyer or are (should be) for the buyer's account and
- In view of the circumstances, compliance with the agreement can no longer reasonably be required.
In the event that orders are cancelled due to government measures to prevent the Corona virus, trade in floricultural products can no longer take place in all cases. However, the buyer must then prove that the products were destined for that country and that particular chain of stores and that the store(s) actually had to close their doors by order of the government. If this is not the case and the shop is simply open, for example, then an invocation of force majeure is unfounded. It is then wise not to agree to the cancellation and to object to it with the buyer.
2. What should I do if the buyer wrongfully invokes force majeure?
It is possible that a buyer who wants to cancel an order may wrongly invoke force majeure. You must always respond to this by giving the buyer written notice of default and requiring the buyer to comply, whereby you can indicate that you will deliver the products to him as agreed or that they are ready to be delivered ex garden. Do this on the agreed delivery date and set the buyer a deadline within which he must comply, otherwise you agree. You can request a sample letter from the order and risk advice department which you can use for this purpose.
3. What should I do if the order is cancelled?
If the buyer justifiably invokes force majeure, or if he is otherwise entitled to cancel or change the order, it is important that you keep a clear record of what the original agreements were (product/delivery dates/numbers/prices) and how they have changed. Register what has happened to the remaining products and what your damage is or what costs you have incurred. Did your products leave at lower prices, to another buyer, at another time, or through the clock? It is important that you can prove this. Even if the products have been destroyed. The government has promised to compensate entrepreneurs through a compensation fund. To be eligible, your proof and registration must be watertight.
4. Can't Royal FloraHolland warn me?
Large exporters can sometimes send a general mailing to all their suppliers in order to collectively cancel or change all orders. In that case, it concerns more than one grower. It is not possible for Royal FloraHolland to approach all growers collectively to act on their behalf and tell them how to respond to such a request. This is not possible. Every grower-buyer relationship is unique and Royal FloraHolland is not always aware of these relationships, the content of the contracts, future agreements and changes to them. In addition, a change for grower A does not always automatically mean a change for grower B. So if grower A lets us read a letter, we will not be able to respond to any changes.
5. I can't fix it with the exporter, can Royal FloraHolland do something for me?
First of all, it is important to stay on good terms with your business relationship. Call the buyer and try to fix it together. Then you not only look at what you have to do, based on legal rights and obligations, but you also look at what you want to do. Purely as an investment in the business relationship. But in times of crisis, such as now with the outbreak of the Corona virus, the damage is so great that it is difficult for all trading partners to bear. And if you feel that you are being wronged, talking to the other party becomes more and more difficult. The order and risk advice department can support you in this and can mediate in conflicts or give advice on rights and obligations if one of the parties needs it. You can also request the example letter with which you can reject a claim of force majeure. The order and risk advisors can be reached via the Customer Contact Center.