Contracts and Pricing – Forward Contracts or Spot Deliveries of U.S. Grain into Canada

What is the process for entering into forward contracts or making spot deliveries of U.S. grain into Canadian grain facilities??

Grain generally enters the Canadian grain system under contracts that specify the delivery period, either spot or deferred.

In Canada a verbal agreement is considered an enforceable contract, however, in most cases a written confirmation will be forwarded to the producer to be signed.

Sellers of U.S. grain wishing to deliver to a Canadian grain facility are advised to contact the company prior to delivery to obtain the information necessary to conclude a commercial transaction.

Please note that while many of the contracts used to buy and sell grain include clauses under which buyer and seller agree to comply with the U.S. and Canadian regulatory prerequisites applicable to the contract, the grain buying and selling is an environment under which grain is essentially traded with an “implied warranty of merchantability” meaning the grain being sold is subject to a warranty implied by law that goods are reasonably fit for the general purpose for which they are sold. In international sales law, merchantability forms part of the ordinary purpose of the goods. According to Article 35(2)(a) of the United Nations Convention on Contracts for the International Sale of Goods, a seller must provide goods fit for their ordinary purpose.

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