Rejection of Claim refers to the act by one party (usually the seller, carrier, or insurer) in international trade of refusing a claim made by another party (usually the buyer or consignee). It commonly arises in disputes over non-conforming goods, short shipment, delayed delivery, or cargo damage. When rejecting a claim, the reasons must be clear, reasonable, and based on the contract or relevant law (such as the CISG), and the rejection should be issued in writing within a reasonable time; otherwise, it may be deemed acceptance of the claim. Rejection of Claim is the opposite of Settlement of Claim, which means accepting and processing the claim. Unlike a Defense, which may challenge only the procedure or amount of a claim, Rejection of Claim directly denies the substantive right to claim. Trade practitioners should retain sufficient evidence (e.g., inspection reports, bill of lading remarks, correspondence) and note that improper rejection may lead to arbitration or litigation, or even damage customer relationships.
📝 Examples
1. Because the buyer failed to raise quality objections within the inspection period stipulated in the contract, the seller formally issued a letter rejecting the buyer's subsequent quality claim. (Note: The seller rejects the claim on the grounds of expiration, emphasizing the importance of time limits.)
2. The carrier rejected the claim for cargo damage caused by severe weather based on the exemption clause in the bill of lading. (Note: The carrier invokes an exemption clause to refuse compensation, reflecting the allocation of risk in the transport contract.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
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