1. Understanding Your Contract Rights

• Acceptance Criteria: Review the SAT document for tolerances (speed, dimensions, load, cycle times). ±5% deviation may be allowed; check specifics.

• Remedies Clause: Identify remedies:

• Price reduction / partial refund

• Replacement unit

• On-site correction by supplier

• Ensure timelines are defined

• Local Repairs: Supplier-approved local repair may be reimbursed—always get written consent first.

2. Documenting the Discrepancy

Good documentation strengthens your claim:

• Measure machine dimensions accurately (length, width, height, forks, wheelbase)

• Record video showing AGV operation highlighting the discrepancy

• Collect load test or cycle time data if below spec

• Compare results against SAT requirements

• Prepare a Non-Conformance Report (NCR) with photos, measurements, and video timestamps

Tip: Send the NCR within 48 hours of SAT to preserve claim rights.

3. Negotiating Remedies

Key: Always negotiate in writing with attached measurement evidence.

4. Returning a Non-Conforming Machine to China

• Check Incoterms: DDP / CIF → supplier may handle; FOB → you may organize return

• Get customs export permit

• Use experienced freight forwarder

• Document machine condition with photos and packing checklist

⚠️ Returning the AGV is costly; local fixes are often faster if supplier approves.

5. Local Fixes & Cost Recovery

• Obtain written approval from supplier before any repair

• Use qualified US machine shop or integrator

• Document repair with invoices and photos

• Submit for reimbursement per contract

• Without approval, supplier may reject claim

6. Legal Arbitration

• Check governing law & dispute resolution: often Hong Kong, Singapore, China

• Arbitration: CIETAC, ICC, or US courts if specified

• Keep all communications, photos, reports, emails

• Avoid informal verbal claims—they carry little weight

7. Practical Workflow

1. SAT identifies discrepancy → document with photos/videos

2. Draft NCR → send to supplier immediately

3. Review contract remedies → propose resolution (price reduction, onsite fix, local repair)

4. Seek written approval for any local fix or replacement

5. Track repair costs, communications, and approvals

6. Escalate to arbitration if no resolution within contract timeline

✅ Key Insights

• Document everything immediately during SAT

• Know your contract: acceptance criteria, remedies, and local repair clauses

• Never modify the machine locally without supplier approval

• Legal recourse is possible but slower and costly—negotiate first