Scenario 4 of 6
FAS New York fixes delivery but not where conformity is judged
The Buyer opens the cartons in Switzerland and rejects. The Seller says its obligation ended at the ship's rail in New York, an ocean voyage earlier.
The situation
The goods pass the ship's rail at New York and are accepted for loading without objection. On arrival in Switzerland the Buyer opens the cartons, finds the birds non-conforming, and rejects. The Seller argues that under an FAS term its obligation was discharged alongside the vessel in New York, that risk and the burden of inspection passed there, and that a rejection tendered an ocean voyage later is untimely. The Buyer argues that FAS allocates freight, risk, and cost — not the substantive question whether the goods conformed — and that it had no realistic opportunity to inspect frozen, individually wrapped, cartoned poultry at dockside.
FAS is a cost-and-risk term. It says who pays freight and who bears loss in transit; it says nothing about whether what was loaded was the thing that was sold. And the Seller's own specification defeats its argument: this contract requires the birds to be individually wrapped in cryovac and sealed in fiber cartons. A term that mandates concealment of the goods cannot simultaneously demand that the Buyer detect a latent defect at the moment of loading.
FAS New York is the whole of the delivery obligation. Once the goods were placed alongside the vessel and accepted for loading, performance was complete and risk passed. On the Buyer's reading the Seller remains exposed for the length of a transatlantic crossing plus whatever cold-storage interval the Buyer chooses before opening a carton — an open-ended liability the delivery term exists precisely to foreclose.
Weak point
The contract states a delivery term but contains no inspection procedure, no place or time for inspection, no rejection mechanism, and no notice period — so the document is silent on the one question that decides the dispute: whether conformity is measured at the New York rail or at the destination.
Likely outcome
The Buyer probably preserves its right to inspect on arrival, and the packing specification is why. Goods that the contract itself requires to be individually wrapped in cryovac and sealed in cartons cannot meaningfully be examined at the point of loading, and a term requiring concealment of the goods sits badly with an argument that failure to detect the defect at that point waives the objection. But the Seller's position is not frivolous — an FAS term does real work, and an indefinite arrival-side inspection right would leave the Seller exposed for the length of a transatlantic voyage plus a cold-storage interval. The gap is genuine; the outcome turns on how much weight a tribunal gives the packing clause.
Proposed amendment
Buyer shall inspect the goods within [ten] days after arrival at the destination port and shall give Seller written notice of any non-conformity within [five] days thereafter, failing which the goods are accepted. Passing of risk under the FAS term does not constitute acceptance of the goods as conforming.
Anchored in the contract
L3all chicken individually wrapped in cryovac, packed in secured fiber cartons
Read in context → L475,000 lbs. 2½-3 lbs. …… @ $33.00 / 25,000 lbs. 1½-2 lbs. …… @ $36.50 / per 100 lbs. FAS New York
Read in context →