GAFTA (Global Agricultural Trade Association) has developed standards for pro forma contracts that serve as the basis for agreements between sellers and buyers in international agricultural trade https://fortiorlaw.com/news/gafta-arbitration/. These standards are an integral part of agreements governing the supply of grain, oilseeds, feed and other commodities. A GAFTA pro forma contract is a preliminary agreement that includes key terms of the transaction, such as price, quantity, delivery terms, insurance and other important details. The contract serves as the basis for the final agreement, ensuring transparency and minimizing risks for both parties. The main elements of GAFTA pro forma contracts are: Price and currency: Specifying the exact value of the goods, as well as the currency in which the payment will be made. Terms of delivery: Include methods and conditions of transportation, delivery times, and the distribution of responsibilities between the seller and the buyer. Quality of goods: Defines the quality of the goods and the criteria for their acceptance, including quality standards and certificates. Insurance and Risk: Conditions for insuring the goods, as well as the liability of the parties for loss of or damage to the goods at various stages of transportation. Dispute Resolution: Establishing procedures for resolving disputes, including the choice of jurisdiction and arbitration. Additional Conditions: These may include various conditions such as force majeure, changing prices and other circumstances that may affect the performance of the contract. Using GAFTA standard forms of contract helps parties reach agreements more quickly, eliminate disputes and improve the efficiency of international trade in agricultural commodities.
GAFTA contracts can get pretty detailed, but understanding them is key to making sure all parties are on the same page. For everyone involved in trade agreements, it’s a good reminder of why you should read terms and conditions carefully. These contracts cover a lot of specifics that protect both buyers and sellers, especially with things like quality standards and dispute resolution. Missing a detail could lead to unexpected complications later. It’s definitely worth the time to go through each section to avoid any misunderstandings down the line.
