For grain sold in Canada, what are common contracting terms?
Grain contracts will generally contain quantity to be delivered, pricing terms, delivery period, and conveyance type – truck or rail.
In Canada a verbal agreement is considered an enforceable contract, however, in most cases a written confirmation will be forwarded to the seller to be signed and returned.
Contract prices are normally quoted on the basis of Canadian dollars per metric tonne (2204.6 pounds). Price conversion tables and calculators are available here.
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.