(a) Pursuant to this chapter, upon the verified complaint of the consignor, the secretary may disallow to a commission merchant, all or part of, any adjustment charged back to any consignor similarly situated, if the secretary determines that there is insufficient justification of the condition or circumstances requiring the adjustment.

(b) In determining whether there is insufficient justification for an adjustment, the secretary shall first determine if any waivers or agreements have been entered into pursuant to this chapter. If a waiver or agreement has been entered into and the secretary determines that the waiver or agreement complies with Section 56280.5 and does not otherwise violate this chapter, the secretary’s inquiry in determining this adjustment shall be governed by the terms and conditions of the waiver or agreement.

(c) If there is no waiver or agreement, or if the waiver or agreement violates this chapter, as determined by the secretary, in determining whether there is insufficient justification for an adjustment, the secretary shall consider, among other things, the following:

(1) The certificate issued pursuant to Section 56280 or 56351 does not support breach of contract.

(2) The perishability of the farm product involved and the timely issuance of the certificate pursuant to Section 56280 or 56352.

(3) Market reports or other market evidence does not support a downward price adjustment in accordance with Section 56279.

(Amended by Stats. 1996, Ch. 620, Sec. 19. Effective January 1, 1997.)