Mitigating Litigation with the NHLA Sales Code

Over the past month, I have been made aware of a couple of issues from members that needed clarification regarding the proper procedure for handling shipments where the buyer and seller disagreed on the grade and value of the lumber. When the shipper asked about looking at the lumber to verify, the buyer stated that it was already on sticks and combined with other lumber and would be impossible to access.

Several aspects of this issue must be addressed to find resolution. The first, determine if the shipper agreed to sell to the buyer on the buyer’s grade and count. This would leave little for the seller to argue about as they agreed in advance to the outcome.

If the buyer did not inform the seller that they are buying on their grade and count, we would determine if the purchase agreement stated “NHLA Rules and Sales Code shall Govern” somewhere on it. If it did have that statement, we would utilize Article X of the Sales Code on page 80 of the 2023 Rules Book.

Under Section 3, it clearly states: “If an unsatisfactory difference exists between the amount of seller’s invoice covering the shipment and the value of the shipment computed from the buyer’s measurement and inspection, the buyer shall hold the entire shipment intact and report this difference to seller within fourteen days after unloading the shipment and furnish seller with piece tally, unless buyer and seller agree otherwise.” The statement “the buyer shall hold the entire shipment intact” would need to be honored, or the buyer would be in violation of the NHLA Sales Code. In this case, the seller’s original invoice must be paid.

If the lumber was not purchased as “buyer’s grade and count” and there was no mention of the statement “NHLA Rules and Sales Code shall Govern,” then the buyer and seller are to work out how to handle the questionable shipment. NHLA could get involved if they both agree to allow NHLA to inspect the lumber. If they cannot work it out, the only recourse may be litigation.

Moving Forward with the NHLA Strategic Plan

In May this year, the NHLA Board of Directors voted to adopt a new Strategic Plan. The plan created new and solidified previous objectives for the various departments within the Association. The plan calls for renaming some departments. The Inspection Services Committee will become the Lumber Services Committee to better align with our objectives and the work we are currently doing. The Inspector Training School Committee name will remain the same.  

The objectives of the Lumber Services Committee are as follows:

• Provide lumber inspection and training for the hardwood industry.
• Provide quality control, yield recovery services, and training as deemed necessary by the membership.
• Expand the value of kiln-dried and facility-grade certification programs for the hardwood industry.
• Grow utilization of services by the membership.

Most of these objectives are already being implemented or have been focused on for years.

The objectives of the Inspector Training School Committee will be as follows:

• Train industry-leading and qualified hardwood lumber inspectors.
• Continually educate industry personnel in other areas as needs arise.
• Expand education opportunities to satisfy the needs of technological advancements.
• Continue to grow ITSEF support for students.
• Increase enrollment in the ITS.

These objectives will remain our focus as we continue to grow our educational opportunities through webinars, classes, and seminars.