Exportation of Grain Seeds – All you need to know

English law, which historically has always been, if not the fundamental component of international trade, then one of the most commonly utilized tools of its regulation to date, is therefore twice as tough for traders who grew up professionally in the fold of continental law.

Since associations and international organizations, whose legal framework is based on English law, coordinate almost all of the world’s trade in grains, oilseeds, metals, and other staples as well as international cargo shipping, precise comprehension of some alien ideas and concepts is extremely important for producers and traders who seek to have a presence in any of the markets above says Roman Zenon Dawidowicz.

Agreement

The trade contract is the first and most important part of any international trade transaction. It can be as short as ten sentences that sum up the essential terms and conditions of the deal (such as contracts signed under the GAFTA standards that incorporate contracts) or as long as several hundred pages.

Everything is pretty straightforward: before a trader can sell anything, he must have a clear understanding of what needs to be sold, to whom, how, under what conditions, for what price, and what risks (if any) he is willing to face. Roman Zenon Dawidowicz added that the seller needs to make sure that it matches his own exactly to avoid any miscommunication or differences between the parties.

Pay Close Attention to the Contract’s Details

It is important to keep in mind that certain legal systems that are commonly employed in trading are quite particular regarding the so-called product description when choosing what to exchange. The buyer can refuse the goods and demand payment for non-performance if, for example, a contract specifies that “wheat of the Russian origin to be delivered in December” and the same wheat is delivered in January without any justification.

Phrases like “goods of normal marketable quality” require equal caution since, while it is generally understood that such goods must meet certain requirements for being considered “normal marketable quality,” there may be no clear standards for evaluating them. For instance, the English statute described above gives the seller the right to end a transaction if the products are not “of satisfactory quality,” yet there are hardly any cases that clarify or explain this idea Roman Zenon Dawidowicz.

Rivals

It is impossible to overstate the importance of choosing a counterparty, not simply to ensure the counterparty’s solvency. Before the agreement is confirmed, if you trade through a broker or other intermediary, you should get all the information you can about the counterparty, how it operates, its reputation as a business, etc. from them.

Sometimes it is not worth it to accept a large offer from a business you do not know well or if you have concerns about the company’s legal standing. To prevent the trade from being deemed invalid or from being challenged, one must also be aware of the authority vested in the counterparty’s signatory.

Delivery of the Merchandise

As sea transport is one of the least expensive but most challenging forms of shipping to arrange, it is also one of the most popular ways to transport products across vast distances, especially grain crops. The two most common terminology for sea freight deliveries historically have been FOB (free on board) and CIF (cost, insurance and freight), or its equivalent C&F/CFR (cost and freight), which is more common for shipments of goods inside the Black Sea region.

The identification of the moment of risks or ownership transfer, as well as a different approach to pricing because of additional costs imposed by the CIF seller, are the main distinctions between FOB and CIF. The critical point in FOB shipping is when the goods cross the ship’s rails, at which point the buyer assumes all risk of loss or damage to the cargo as well as title to it.

In contrast, in CIF shipping, the buyer assumes all risk at the time of goods loading, and the seller retains title to the goods until the shipping documents are provided unless the parties agree otherwise.

It’s also crucial to keep in mind that the two aforementioned options call for several sequential, mandatory actions from each party (such as the buyer’s identification on FOB terms) and that any delay could result in unanticipated legal repercussions or even the contract’s termination for non-performance.

Contract for Shipping or Charter Party

Depending on who, what, where, and under what conditions commodities are being shipped, there are two main types of contracts used in international trade. This is known as a charter party, a contract that governs the relationship and extent of each party’s mutual duty in the event of long-distance or sufficiently frequent shipments.

Simultaneously, the bill of lading verifies the loading and shipment of gods. It generally attests to the transfer of ownership or title to pertinent goods and offers legal grounds for lawsuits to be filed with a court of law or another competent dispute resolution tribunal to recover damages for goods lost or damaged during shipment.

Roman Zenon Dawidowicz says parties to a trade agreement should specify which of the carriers they deal with and on which of the contracts because these forms are frequently used simultaneously.

Parties to a trade agreement should indicate which of these contract forms they use in tandem with the carrier, as this will be important when it comes to making a claim for damages, bringing legal action against the carrier, and figuring out the extent of the latter’s liability under certain international conventions and rules that are included in the agreements (e.g., the Hague Rules 1924 or the Hague-Visby Rules 1968, which may provide different interpretations to certain aspects of the parties’ liability).