§1Define a reject
Use the reject criteria from your spec sheet, word for word. A pallet that meets any one of them is a reject. Avoid "acceptable quality" or "industry standard"; they can't be measured.
§2Sample, don't eyeball
Agree a sampling plan. Attribute sampling tables such as ANSI/ASQ Z1.4 give a sample size for each lot size and an accept/reject number for a chosen quality level. Both sides then know when a delivery fails.
§3Credits and pickup
Common terms: credit at the invoice price for each rejected pallet, pickup of rejects at the supplier's cost within a set number of days, and a notice window (for example, rejects reported with photos within five working days of delivery).
If a whole delivery fails the sampling plan, decide whether you can reject the lot or must sort it. Sorting costs you labour; write who pays.
§4Escalation
Track the reject rate monthly. Set a threshold (for example, two consecutive months above the agreed rate) that triggers a corrective-action plan, and a higher one that gives you the right to move volume. Model clause wording is in the reject and credit clause.
§5Measuring quality without arguments
Agree how a delivery is sampled before the first load arrives. Decide who inspects, how many pallets from each load, what counts as a reject and how it is recorded. A photo of each rejected pallet, with the load reference, settles most disputes.
Track the reject rate by supplier and by plant each month. A rising rate is the earliest warning that a supplier is short of good cores or lumber, and it usually shows before late deliveries do.
§6Remedies that work
Credits for rejected pallets are the baseline. Add pickup of rejects at the supplier's cost, a replacement window, and a right to source elsewhere and charge back the difference if replacements don't arrive. Keep the remedies proportionate; a supplier facing penalties that exceed its margin will either price them in or stop bidding.