[Code of Federal Regulations]
[Title 9, Volume 2]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 9CFR203.7]

[Page 51-52]
 
                  TITLE 9--ANIMALS AND ANIMAL PRODUCTS
 
  CHAPTER II--GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION 
      (PACKERS AND STOCKYARDS PROGRAMS), DEPARTMENT OF AGRICULTURE
 
PART 203_STATEMENTS OF GENERAL POLICY UNDER THE PACKERS AND 
STOCKYARDS ACT--Table of Contents
 
Sec. 203.7  Statement with respect to meat packer sales and purchase contracts.

    (a) The Grain Inspection, Packers and Stockyards Administration 
(Packers and Stockyards Programs) 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

[[Page 52]]

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 Grain Inspection, 
Packers and Stockyards Administration (Packers and Stockyards Programs) 
area 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 the Administration.
    (c) If the Grain Inspection, Packers and Stockyards Administration 
(Packers and Stockyards Programs) 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]