The same contractual figure — "maximum 4% fibre" — can mean two entirely different things depending on where in the contract it appears. In 1977, that distinction cost a seller 9,500 tonnes.
Most traders have seen it hundreds of times. A specification is added to the cargo description — minimum protein 12.5%, maximum moisture 13%, some other parameter — because that is how it has always been done, because the broker included it, because nobody thought it mattered much.
Then it matters enormously.
Tradax Export sold 9,500 tonnes of soya bean meal to Goldschmidt. The contract described the cargo as:
"Soya bean extracted meal, Argentine, new crop, maximum 4% fibre"
The cargo arrived with fibre exceeding the contractual maximum. Goldschmidt rejected the entire shipment.
Tradax took the view that a fibre specification was a quality term. A slight excess warranted a price reduction, not rejection of 9,500 tonnes.
The court disagreed.
The court could have examined how significant the excess was. Whether it affected the commercial value of the cargo. Whether the buyer had actually suffered.
Instead, the court looked at location.
Consider two contracts. Both say "maximum 4% fibre". Same commodity, same figure. But in one contract the specification sits within the cargo description. In the other it appears in a quality clause.
The outcomes are different.
A specification forming part of the cargo description defines what was sold. Any breach entitles the buyer to reject — the cargo simply is not what was contracted for.
The same figure in a quality clause is a warranty. Breach gives rise to a damages claim. It does not, by itself, entitle the buyer to reject.
In Tradax v Goldschmidt, "max 4% fibre" was in the description. Goldschmidt had every right to reject. And did.
Every specification written into a cargo description is a promise about what is being sold — not merely how good it is. If the cargo fails to meet any one of them, the buyer is not looking at a discount. He is looking at a different cargo.
Before including any specification in a cargo description, ask whether you are prepared to treat it as a condition of the sale itself. If the answer is no — it belongs in the quality clause, not the description. The distinction is not drafting formality. It determines whether the buyer can walk away.