Building Materials Perspective | Quality Objection Period for Defects in Custom Glass

Published:

2022-05-07

Introduction As an important part of the building materials industry, glass has played an important role in real estate, automobiles, solar appliances and other fields. The glass industry related to the upstream and downstream industry chain is long, involving many subjects, complex trading patterns, and prone to disputes. Through the statistics of glass enterprises related cases in recent years, we observe that the legal disputes faced by glass enterprises mainly focus on contract and quasi-contract disputes, labor and personnel disputes, tort liability disputes and so on. Among them, under contract disputes, sales contract disputes, loan contract disputes, contract disputes, construction contract disputes, lease contract disputes are common types of disputes. In terms of the geographical distribution of cases, the number of legal disputes related to glass enterprises in Shandong Province ranks second in the country. On the one hand, the number of glass enterprises in Shandong is in the forefront of the country. On the other hand, it also reflects that some glass enterprises need to pay attention to the prevention, control and response of legal risks. Sales is an important part of glass enterprises, in the process of glass sales "custom glass" is often signed in the form of contract. A contract of contract is a contract in which the contractor completes the work in accordance with the requirements of the contractor, delivers the results of the work, and is paid by the contractor. In a contract of work, the party who completes the work as agreed is called the contractor and the counterparty is called the fixer. The most common risk of disputes in glass customization contracts is the quality of customized glass. The common situation is that the fixer refuses to pay the amount payable by the glass company or requests to terminate the contract on the grounds that the product has quality problems, while the glass company, as the contractor, thinks that the fixer has already met the payment conditions and should pay the price according to the contract. The above differences are easy to cause litigation. This paper will combine the relevant laws and regulations and cases to analyze the quality objection period and the conditions for the termination of the contract that the contractor unilaterally believes that the work results delivered by the contractor have quality defects. Referee's point of view Case 1:(2021) Yu 03 Min Zhong No. 533 [Case Introduction] China X Da Decoration Engineering Group Co., Ltd. (hereinafter referred to as "Decoration Company") is the ordering party and North X Glass Technology Co., Ltd. (hereinafter referred to as "Glass Company") is the contractor to sign two "Processing Glass Orders Contract", which stipulates that the glass company orders the glass according to the requirements of the decoration company. The contract stipulates the provisional total price and settlement method. In addition, article 7 of the contract stipulates that if the ordering party considers that the variety, configuration, specification, quantity and quality of the glass are inconsistent with the contract, it shall submit a written objection to the contractor within 15 days after receiving the glass, otherwise, the glass shall be deemed to conform to the contract; if the ordering party has used the glass, it shall also be deemed to be qualified. Article 8 stipulates that when installing and using glass, the ordering party shall first inspect the variety, configuration, specification processing requirements and surface quality of the glass, otherwise, the contractor shall not compensate for the losses caused. The two sides also agreed on quality and acceptance standards and other terms. After the contract was signed, the glass company fulfilled its contractual delivery obligations and issued a special VAT invoice to the decoration company. The decoration company paid a total of 1.04 million yuan to the glass company, but it still owes 269000 yuan. Due to the decoration company's delay in fulfilling its payment obligations, the glass company sued the court for the decoration company to pay the glass, and the decoration company argued in the lawsuit that the glass had quality problems and refused to pay. [The court held that] the contract signed by both parties is legal and valid, and both parties shall perform their respective obligations in accordance with the contract. In this case, the glass company has delivered the ordered glass to the decoration company in accordance with the contract. The decoration company argued that the reason for its refusal to pay the remaining amount was that the glass delivered by the glass company was delayed and had quality problems. First of all, the two parties clearly agreed in the contract that the ordering party believes that the variety, configuration, specification, quantity and quality of the glass do not conform to the contract, it shall submit a written objection to the contractor within 15 days after receiving the glass, otherwise, the glass shall be deemed to conform to the contract. If the ordering party has already used glass, the glass is also deemed to be qualified, but the decoration company has not provided sufficient evidence to prove that it has sent written materials to the glass company within the objection period agreed in the contract. Secondly, it has been more than four years since the glass company delivered the glass. After the glass company sued, the decoration company argued and counterclaimed that the delivery of the goods was delayed and there were quality problems, which was obviously inconsistent with market trading habits. Even from the time when the decoration company last raised questions about the quality of the glass involved in the case, its claim obviously exceeded the statute of limitations, so its application for appraisal of the quality of the glass involved in the case was not allowed. Combined with the fact that the decoration company has fulfilled its obligation to pay nearly 80% of the total amount of the two fixed contracts, it will not accept the above-mentioned reasons for refusing to pay the remaining amount. The second instance of this case upheld the original verdict. Case 2:(2021) E 09 Min Zhong No. 2963 [Case Introduction] X Special FRP Company (hereinafter referred to as "FRP Company") and X Xiang Chemical Company (hereinafter referred to as "Chemical Company") have signed one FRP processing contract and one technical agreement each. Among them, the glass fiber reinforced plastic processing is stipulated in the contract: 6. quality assurance: the contractor guarantees that the service life of the equipment is 20 years, and that the equipment provided to the employer has not been used. under the conditions of correct installation, normal use and maintenance, the quality warranty period of the main equipment is 3 years. if there is any quality problem in the main equipment within 3 years, the contractor shall repair or replace the corresponding parts free of charge, the maintenance or replacement of the equipment corresponding extension of the quality assurance period, if the maintenance still does not meet the requirements of the demand side, the contractor shall pay the contractor according to the contract value of the purchased equipment... Since then, the two sides have signed a processing contract and supplementary agreement, installation contract, etc. After FRP completed the installation of FRP storage tanks, the chemical company refused to pay the remaining amount and demanded a refund on the grounds of leakage. After that, FRP sued the court for compensation for processing. [The court held that] the existing quality problems of the glass fiber reinforced plastic storage tank involved in the case could not lead to the termination of part of the contract between the two parties. Once a contract is established, it shall have legal effect, and the parties shall perform their obligations in accordance with the agreement and shall not modify or terminate the contract without authorization. In this case, the liability for breach of contract in the Processing Contract stipulates that if the equipment provided by the contractor does not meet the quality requirements (specifications, quality, performance) stipulated in the contract, the contractor shall repair according to the requirements of the contractor, and return the goods after the repair still fails to meet the requirements....... From the above agreement, if the equipment provided by the glass steel company does not meet the quality requirements agreed in the contract, it should first be repaired according to the requirements of the chemical company, and then returned if the repair still fails to meet the requirements. Regarding the quality problems of the storage tanks involved in the case, from the content of the FRP company's reply on April 1, 2019, the problems raised by the chemical company have been rectified. By the time Glass Steel filed its lawsuit in October 2019, there was no evidence that Chemical had raised a quality objection to Glass Steel. In the litigation of this case, it was identified that some storage tanks had quality problems. According to the contract, maintenance should be carried out first, and the goods should be returned after the maintenance still failed to meet the requirements. Now the chemical company has not submitted evidence to prove the fact that the quality problems of the storage tanks cannot be solved through maintenance. Moreover, in the second instance, the chemical company stated that 10 storage tanks involved in the case are still in use, so it is not enough to prevent the contract purpose, the reasons for the chemical company's request to terminate part of the contract cannot be established, and its litigation request has no factual basis and legal basis, and this court will not support it. If the tank involved in the case is repaired and there are still serious quality problems, the chemical company may sue separately to claim its rights. Lawyer Law Review From the above cases, we can infer that the common view of the court is that in the contract for the quality of the disagreement period is agreed to be subject to the contractual agreement, in addition to the actual time of use of the fixer and whether it has been repaired and other circumstances comprehensive judgment. However, if there is no clear agreement in the contract on how the quality objection period should be determined, there is still some controversy. One way of thinking is that the current Civil Code and judicial interpretation of the contract for the contractor to raise quality objections is not clearly defined, so it can be compared to the general statute of limitations period as the period of objection. According to the relevant provisions of Article 780 of the Civil Code on the delivery and acceptance of the contract, and with reference to the provisions of Article 188 of the Civil Code on the limitation of action period, the contractor has the right to raise objections to the quality defects of the delivered products within 3 years after the completion of the contract, and the contractor is also obliged to bear the liability for defect guarantee for the quality of the fixed crops within 3 years. Another way of thinking is to refer the contract of contract to the provisions of the quality objection period of the contract of sale. In accordance with Article 780 of the Civil Code, the fixer has a legal obligation to accept the results of the work. That is to say, when accepting the results of the work, if the obvious quality defects found by the naked eye or existing technical means can be inspected by certain national or industry standards, they should raise objections in time. For hidden defects, that is, those that cannot or are not easy to find during acceptance and can only be found in subsequent use, objections should also be raised in time. If the objection is not raised in time, the quality may be presumed to be qualified and the fixer shall pay the price as agreed in the contract. For the limit of the longest quality objection period of the contract, reference may be made to Article 621 of the Civil Code, "If the parties agree on an inspection period, the buyer shall notify the seller of the fact that the quantity or quality of the subject matter does not conform to the agreement within the inspection period. If the buyer fails to give notice, the quantity or quality of the subject matter shall be deemed to be in conformity with the agreement. If the parties have not agreed on an inspection period, the buyer shall notify the seller within a reasonable period of time after discovering or should have discovered that the quantity or quality of the subject matter does not conform to the agreement. If the buyer fails to notify the seller within a reasonable period of time or within two years from the date of receipt of the subject matter, the quantity or quality of the subject matter shall be deemed to be in accordance with the agreement; however, if there is a quality assurance period for the subject matter, the quality assurance period shall apply, and the two-year provisions shall not apply. If the seller knows or should know that the subject matter provided does not conform to the agreement, the buyer is not subject to the notice time limit stipulated in the preceding two paragraphs." By reference to the maximum period specified under the contract of sale, it may also be presumed that the period of quality objection to the contract of contract is set at 2 years. That is, within 2 years, regardless of whether the fixed crop quality defects are found by the fixer, as long as no objection is raised to the contractor, the approved quality is deemed to be qualified. If the quality objection period is exceeded, the author shall not have the right to refuse payment or request the termination of the contract on the basis of quality problems. In short, legal disputes over the period of objection to glass quality defects should comprehensively consider the nature of the transaction, the purpose of the transaction, the way of the transaction, the way of the transaction, the type, quantity, nature, installation and use of the subject matter, the nature of the defect, the reasonable duty of care, the inspection method and the degree of difficulty, the specific environment, their own skills and other reasonable factors, based on the principle of good faith to judge. In addition, it is necessary to request the glass enterprise as the contractor to make clear and specific the agreement on the quality clause in the processing contract business. If the quality is not clear or only through oral agreement, once both parties have disputes, they will hold their own opinions on the quality standard. If the quality is subject to the sample, attention should be paid to sealing the sample and describing the sample in writing to avoid quality disputes due to the loss or natural damage of the sample. This epidemic is in danger of organic, enterprises now practice good internal work waiting for the flowers to bloom. Many building materials and other processing and manufacturing enterprises, including glass companies, in addition to strictly controlling product quality as always, should also firmly establish the awareness of risk prevention and control and the awareness of the chain of evidence, and give full play to the important role of the law in the whole process of enterprise management and transactions, so as to effectively avoid risks and escort the rapid development of enterprises after the epidemic.

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