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A Shangdong exporter entered into an agreement to sell two metric tons of Chinese peanuts with a Singapore company. Both the L/C and Sales Contract

A Shangdong exporter entered into an agreement to sell two metric tons of Chinese peanuts with a Singapore company. Both the L/C and Sales Contract specified that the peanuts were of grade 3. When preparing goods for shipment, the seller found that grade 3 Shangdong peanuts were out of stock. In order to make timely delivery, the seller shipped some grade 2 peanuts and stated in the commercial invoice that the price stayed unchanged.

Questions: 1) Is it reasonable for the exporter to do so?

2) What kind of risk may exist for the seller?

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