§ 203.7 Statement with respect to meat packer sales and purchase contracts. ( a ) The PSD receives numerous complaints concerning the failure or refusal of buyers to pay the full purchase price for, or to accept delivery of, their purchases of meat and meat food products and sellers failing to meet contractual specifications. Most such complaints arise out of disputes concerning condition, grade, weight, or shipping instructions.
( b ) It is believed that both seller and buyer should take the following points into consideration when selling and buying meat and meat food products: ( 1 ) *Terms of shipment and time of arrival.* Terms and conditions of shipment and delivery should be specified in the contract and both parties should understand fully all terms and conditions of the contract. Any deviation from normal practices, such as a guaranty by the shipper as to the date of arrival at destination, or a deviation from the normal meaning of terms, should also be fully understood and made a part of the contract.
( 2 ) *Quality and condition.* ( i ) A seller has the responsibility of making certain that the meat and meat food products shipped are in accordance with the terms of the contract specifications.
( ii ) When a buyer believes that the shipment does not meet the terms of the contract, he should immediately contact the seller or the seller's agent and advise him of the nature of the complaint. This affords the seller an opportunity to renegotiate the contract, to personally inspect the meat or meat food products, or to have an impartial party inspect or examine the meat or meat food products. Inspection and examination service of this type is available nationally through the USDA meat grading service and locally through various impartial persons or agencies.
( iii ) All terms of a transaction should be made clear in the contract, whether written or verbal. If there is any chance of misunderstanding, a written confirmation should be exchanged between the parties. In any case where a contract dispute cannot be settled between the parties and either party intends to file a complaint, such complaint should be brought to the attention of the nearest PSD regional office as soon as possible. However, a concerted effort on the part of both buyer and seller to negotiate clear and complete contracts will greatly reduce misunderstandings which can result in the filing of complaints with PSD.
( c ) If the PSD has reason to believe that any packer unjustifiably ( 1 ) has refused to pay the contractual price for meat or meat food products purchased,
( 2 ) has refused to accept a shipment of meat or meat food products, or
( 3 ) has failed to ship meat or meat food products in accordance with the terms of the contract specifications, consideration will be given to the issuance of a complaint charging the packer with violation of section 202 of the Act. In the formal administrative proceeding initiated by any such complaint, the Judicial Officer of the Department will determine, upon the basis of the record in the proceeding, whether the packer has violated the Act and should be ordered to cease and desist from continuing such violation.
(Secs. 407(a), 4, 42 Stat. 169, 72 Stat. 1750; 7 U.S.C. 228(a). Interprets or applies sec. 202, 42 Stat. 161 *et seq.,* as amended; 7 U.S.C. 192)
[30 FR 14966, Dec. 3, 1965, as amended at 32 FR 7701, May 26, 1967; 84 FR 45648, Aug. 30, 2019; 84 FR 56678, Oct. 23, 2019]