For your reference

Industry Common Grading Rules (Common Names)

 

Grade	Description
Clear	Best appearance. Selected for uniformity of light color. Slight variation in the natural sapwood color (sticker stain is not considered a defect). Limited small character marks. Pin knots allowed. Mineral streaks of less than 1/8" x 1" (3 x 25 mm). No checks or splits. Minimum length: 12" (30 cm).
Select & Better	Combination of clear and select grades. he most standard high grade hardwood flooring sold on the world market. Excellent appearance. Variation in the natural sapwood color (sticker stain is not considered a defect). Limited character marks. Sound knots of less than 1/8" x 4" (3 x 100 mm). No stains, checks, or splits. Minimum length: 12" (30 cm).
#1Common	Variegated Appearance. All color variations allowed. Sound knots less than 3/8" (10 mm), flags, worm holes, and mineral streaks allowed. No splits, holes, or voids. Minimum length: 10" (25 cm).
#2Common	Rustic appearance. All color variations allowed. All characteristics of the species allowed. A serviceable floor after knot holes, worm holes, checks, splits, and other imperfections are filled and finished. Minimum length: 10" (25 cm)
Tavern or Cabin	Boards show a lot of character such as light and dark boards, lengths of boards are shorter approx 24" average. Pinholes and knots can be quite evident. May have open worm holes, tight knots or broken knots, burns, and imperfections like a torn grain. Larger holes are filled and finished. Some may contain a large amount of color variation while others may have small and large knots, and major mineral streaking throughout. In addition, some of these floors may have milling inconsistencies such as no tongues, ends not cut square, and the finish may not be up to standards. If cabin or tavern grade hardwoods are appealing because of the low price, expect the characteristics mentioned

 

When a log is milled into Hardwood flooring at the factory the wood is picked for grade (appearance). The better or more uniform the appearance the higher the grade. Both Pre-finished Hardwood flooring and Unfinished wood flooring have similar grading but the names may be different depending on the manufacturer. Starting from the top, the Clear grade is the very best of grades having the most uniformity in color (within its wood species) and longest board lengths of up to 7 feet long (depending on the manufacturer).The lowest grade is called ??Shorts?? or ??Cabin or Tavern?? grades, which means there will be quite a bit of color variation between the boards, open holes, flaws and the average board length, is about 16 inches long.

 

For a more detailed information please go to the NWFA, NOFMA and MFMA site