When goods are delivered under DAP terms, disputes often arise over whether the buyer may withhold payment due to quality concerns. As a general principle, quality claims do not automatically release the buyer from the obligation to pay.

In most DAP contracts, payment is linked to delivery or unloading at the destination and is not conditional upon a quality inspection. Unless the contract clearly states that payment depends on the outcome of a quality check, the buyer must pay the full price on the agreed date. Quality assessment and payment obligations are usually treated as separate contractual matters.

If a buyer refuses to pay despite the absence of a contractual right to do so, the seller is entitled to claim payment and may pursue legal remedies for breach of contract.

At the same time, the buyer is not left without protection. Where the goods show minor deviations from the agreed specifications, the buyer may seek compensation or damages for the supply of non-conforming goods. However, only substantial or material defects give the buyer the right to reject the goods entirely. In such cases, no payment obligation arises.

Resale of Goods under DAP Terms

If the buyer rejects the goods or unjustifiably refuses to make payment, the seller may consider reselling the goods under DAP terms, provided that the goods have not yet been unloaded at the destination and have not been formally accepted by the buyer. In practice, this allows the seller to redirect the shipment and reissue transport documents to a new final buyer.

Contractual Solutions and Risk Mitigation

The most effective way to avoid disputes is to structure contracts so that the quality of the goods is verified at the loading stage. This approach ensures that quality is confirmed before delivery and reduces the risk of payment disputes at the destination.

If the contract provides for quality inspection upon unloading, sellers should appoint their own independent surveyor to participate in sampling and testing. Once sellers accept unloading-based quality inspections, they must carefully monitor the buyer’s compliance with the agreed procedures. Any deviation from the agreed inspection process may invalidate the test results.

In conclusion, careful drafting of contractual provisions on quality control is essential. Addressing these issues at the contracting stage significantly reduces risks for both parties and helps prevent costly disputes after delivery.