Contracts, Incoterms, grading rules and claims

The fifth layer is the one you write yourself. Most disputes in sawn timber are not about the law but about what the contract failed to say.

Incoterms

The ICC's Incoterms 2020 comprise eleven rules. Changes in 2020 include revised FCA wording for sea carriage with an on-board bill of lading, DAT becoming DPU (the seller unloads) and CIF being reserved for maritime trade. Our interpretation of practice:

• FCA is often cleaner for containerised sawn timber because risk passes at a named place when goods are handed to the carrier. FOB, CFR and CIF fit sea carriage and are common for break-bulk or bulk cargoes.
• EXW leaves loading and export clearance to the buyer and often causes disputes about who loads and lashes.
• DAP and DPU put transit risk on the seller. For timber that means rain, staining and condensation risk, so consider wrapping and moisture limits.
• Name the edition and place, for example "FCA [sawmill, town] Incoterms 2020". An Incoterm does not transfer title, set payment terms, or decide who provides plant health, origin or EUDR documents. List those in the contract.

Nine contract terms to check

1. Product: species and origin, dimensions, grade or strength class, moisture and method, surface, treatment.
2. Quantity and tolerance: cubic metres, plus or minus tolerance, nominal or actual dimensions for volume.
3. Price and Incoterm: price per m³, currency, named place and edition.
4. Delivery: shipment period, partial shipments, demurrage and detention.
5. Packaging: pack size, wrapping, spacers, pallets, ISPM 15.
6. Documents: who provides what and by when, including certification claims and EUDR or UKTR information.
7. Inspection and acceptance: where, by whom, sampling and reference standard.
8. Payment: prepayment, documentary credit, documents against payment or open account with credit insurance. A mismatch with a letter of credit commonly delays payment.
9. Claims, force majeure, sanctions, governing law and forum.

This is a synthesis of general practice, not a legal template.

Appearance grading versus strength grading

EN 1611-1 defines appearance grades for European spruces, firs, pines and Douglas firs. A Svenskt Trä publication describes two Nordic rule sets: the Green book (grades I to VI, where I to IV are usually sold together as "U/S", V is "fifths" and VI "sixths") and the Blue book (A, B and C, with A divided into A1 to A4; A for joinery and visible boarding, B commonly for building, C for uses such as packing). RISE also names a Grey book and a Black book (Commercial Grading of Timber, 2020). So name the rule set and edition.

A board can be top appearance grade and fail structural grading, or the reverse. Never mix the two in one contract line.

Dimensional tolerances: a worked example

The publication cites EN 1313-1: +3/-1 mm up to 100 mm and +4/-2 mm above 100 mm in thickness and width, referenced to 20% moisture content; the average must not fall below the target. For a 50 x 150 mm board:

• Thickness 50 mm: from 49 to 53 mm.
• Width 150 mm (above 100 mm): from 148 to 154 mm.

Volume depends on which dimensions govern. A 4.8 m board has a nominal volume of 0.05 x 0.15 x 4.8 = 0.036 m³. At the lower limits it is 0.049 x 0.148 x 4.8, about 0.0348 m³, roughly 3.3% less. That is why the contract must say whether nominal or actual dimensions determine invoiced volume, and why packing list and invoice must use the same basis.

Measuring conventions come from EN 1611-1 and EN 844; thickness and width are measured at least 150 mm from each end.

Quality claims

There is no single global procedure; the contract decides. General practice:

• require written notice within a short period of arrival and before processing;
• keep the goods and packs identifiable;
• use an independent surveyor agreed in advance;
• define remedies (replacement, price reduction, credit) and who bears surveyor costs;
• separate grading defects, transit damage and documentation failures, because evidence and responsibility differ.

Attach a one-page summary of limits, agree the moisture measurement method and sampling plan before shipment, and photograph packs at loading.

Key points

• Name the Incoterm, place and edition; an Incoterm does not allocate plant health, origin or EUDR documents.
• Check nine terms: product, quantity, price, delivery, packaging, documents, inspection, payment, claims.
• Name the grading rule set and edition; keep appearance and strength grading on separate contract lines.
• EN 1313-1 tolerances (+3/-1 mm up to 100 mm, +4/-2 mm above) change the volume, so state nominal or actual.
• Define claims procedure and evidence before shipment.