DAP Contract (GAFTA 78UA)

CONTRACT No. [number]¹

Date: [date]²

[company name]³, represented by Director [director's name]⁴, acting on the basis of the Charter, hereinafter referred to as the «Seller», on the one hand, and

[company name]⁵, represented by Director [director's name]⁶, acting on the basis of the Charter, hereinafter referred to as the «Buyer», on the other hand,

The Seller and the Buyer, hereinafter referred to as the Parties, and each individually as a Party, have entered into this Contract on the following terms and conditions:

1. The Subject of the Contract

1.1. According to this Contract the Seller shall supply the Buyer with the agricultural goods of Ukrainian origin and Buyer shall accept the Goods and pay the value of accepted Goods on the terms and conditions stipulated in this Contract.

2. The Goods

2.1. The Goods: [commodity]⁷ (hereinafter — Goods).

2.2. Quantity of the Goods: [amount]⁸ metric tons +/- [tolerance]⁹ % in Seller’s option.

2.3. The quantity shall be final at the discharge at the time and Place of Destination of the Goods from vehicles as per terminal scales.

2.4. Quality of the Goods: [specification]¹⁰

The quality must comply with EU regulations on the content of non-GMO, heavy metals, toxins, and pesticide residues.

The goods must be of satisfactory commercial quality, in a healthy condition, without self-heating and heat damage during drying, have a normal smell and colour typical of healthy grain, without foreign odours (musty, mouldy, malt, sour or sweet). The goods must be free from quarantine and sanitary facilities, poisonous or harmful substances, pesticides and fumigant residues. Infestation with live grain pests is not allowed. The goods must comply with the requirements of medical, biological, phytosanitary and veterinary quality standards adopted in Ukraine, and be free of harmful impurities. Other quality parameters of the Goods are as per [quality standard]¹¹.

2.5. In the event of a shortage of Goods exceeding the norms of natural losses at the place of delivery — a discrepancy between the data of railway bills ([norm]¹²) or the data of consignment notes and the data of the Terminal — the Buyer shall notify the Seller of such a shortage within 24 hours from the moment the shortage is discovered. The Sellers are entitled to nominate their representative at the Place of Delivery in order to control the acceptance and discharge of the transport with the Goods. In this case the Buyer shall ensure access of the Seller’s representatives to the terminal. In case of Seller’s representative failure to arrive to the Place of destination within 48 hours of such notification, the Goods are accepted without participation of the Seller’s representative; in this case, the general form of the Act, issued by the terminal at the place of destination shall be final for both Parties.

2.6. The quantity of the Goods for final settlements between the Parties shall be determined according to the weight unloaded at the place of delivery according to the terminal register.

2.7. The shipment of the Goods by lots is allowed within the delivery period. The delivery of the Goods is to spread evenly within the delivery period taking into account the capacity of reception of the terminal at the Place of Delivery. The Goods should be uniform in quality in each vehicle. If Goods are found to be not uniform in quality according to the provisions of this Contract and pouring of different quality Goods detected by Seller’s representative and/or independent surveyor during the unloading, the Goods shall be returned to the Seller.

2.8. Quality test results made by the laboratory of the terminal at the Place of Delivery shall be final and shall be at Buyer’s expense.

2.9. Disputes about the quality arising out of disparity between the quality determined by the terminal and the quality indicated in the accompanying documents of quality are regulated as follows:

• The Buyer within 12 hours notifies by email the Seller regarding arrival at the place of destination for commission selection of the Goods’ samples;
• the representatives of the Seller must arrive at the Place of Destination within 24 hours from the receipt of the Buyer’s notice for the joint definition of the Goods’ quality in the laboratory of the terminal. If the Parties have not agreed, the Buyer nominates first class surveying company which is a member of the GAFTA Members Directory (herein referred to as the “Seller’s Superintendent”) whose final results shall not be disputed;
• if the representatives of the Seller do not arrive at the Place of Destination within the specified period, the initial results of determining the quality of the Goods shall be deemed to be accepted by the Seller’s tacit consent and become final and shall not be disputed.

The Party whose quality indicators are not confirmed shall pay all documented costs in relation to quality check and the idle of the vehicles at the Place of Destination and undertakes to pay them within 3 (three) banking days from the date of issuance of respective invoice by the other Party.

2.10. In case the non-conforming quality of the Goods is established, the Buyer has the right, at its own discretion, to:

• reject the Goods, declare the Seller in default, and unilaterally terminate the Contract; or
• demand the replacement of the Goods with Goods of proper quality and in proper condition; or
• demand a reduction in the Price of the Goods, with the right to compensation for direct losses in accordance with existing Contract discounts or as agreed upon by the parties (including costs incurred to bring quality parameters into compliance with Contract specifications).

In case of rejection, the Seller shall collect the Goods and shall bear all expenses of the transport, demurrage and return.

2.11. The Seller declares and warrants that, as of signing this Contract and the transfer of the title to the Goods from the Seller to the Buyer:

• the Seller will have unconditional title to the Goods, and the Seller will acquire its title to the Goods in accordance with clause 4.7 of this Contract;
• the competent authorities did not make and will not make any decision on imposing any encumbrances on the Goods and/or the alienation of the Goods;
• the Goods are not and will not be in a tax pledge, in a dispute and under the prohibition of alienation;
• the Goods will not be sold, donated, withdrawn, exchanged, separated from the assets of the Seller or laid, transferred to management, and will not be transferred to lease (use) in whole or in parts;
• the Seller does not have any obligations, the term of which has become due or will become due in the future (including on the previous contracts, offers, options) for the alienation of the Goods, transfer of individual rights (right of use, right of disposal, ownership) to the Goods;
• the conclusion and execution of this Contract, in particular the transfer of the Goods to the Buyer, is not in conflict with the Ukrainian laws and complies with its requirements, and also confirms that the conclusion and execution of this Contract does not contradict the objectives of the Seller, the provisions of its constituent documents or other local acts.

3. Currency. Price. Payments

3.1. The Currency of the Contract — [currency]¹³. The Currency of the payments — [currency]¹³.

3.2. Price of the Goods: [sum]¹⁴ per one metric ton.

3.3. The total cost of the Goods is [sum]¹⁵ +/- [tolerance]⁹ %.

3.4. Terms of payment

3.4.1. The Buyer shall pay for the Goods in two stages, regardless of the type of transport (rail or road):

3.4.1.1. The first payment in the amount of [share]¹⁶% of the cost of the relevant batch of Goods shall be paid within [term]¹⁷ banking days from the date of:

• receipt of the register of unloading/discharging of the Goods at the Place of Delivery or indicating the relevant vehicle status on the INBULK.com platform; and
• the Buyer’s receipt of a complete set of documents provided for in clauses 3.5 or 3.6 of this Contract (depending on the type of delivery).

Minimum lot for payment — [lot]¹⁸ metric tons.

3.4.1.2. The final payment in the amount of [share]¹⁹% of the cost of the relevant batch of Goods shall be made within [term]²⁰ banking days after presentation by the Seller, by email, of copies of the export customs declaration (EK10-DR), but in any case no later than 30 calendar days after the date of discharge, without taking into account the minimum lot size for payment, upon the Buyer’s receipt of: [specify as required]²¹

3.4.2. The Buyer’s obligation to make each payment arises only after the Seller has duly provided a complete set of documents drawn up in accordance with the requirements of the current legislation of Ukraine and this Contract.

3.4.3. In case of failure to provide or improper execution of documents, the payment deadline shall be postponed until the relevant deficiencies are remedied without imposing penalties on the Buyer.

3.4.4. All payments shall be made in non-cash form to the Seller’s bank details specified in this Contract.

3.4.5. The Buyer’s obligation to pay for the Goods is considered fulfilled on the day the funds are credited to the Seller’s bank account specified in this Contract. The date of payment shall be the date of debiting the funds from the Buyer’s account and providing the Seller with the relevant payment confirmation.

3.4.6. All banking fees charged by the Buyer’s bank and correspondent bank shall be borne by the Buyer. All banking fees charged by the Seller’s bank and correspondent bank shall be borne by the Seller (“SHA” payment terms).

3.4.7. The Parties acknowledge that payments made in [currency]¹³ may be processed by intermediary banks in the USA.

The Parties acknowledge that the receipt of payments into the Seller’s account may, in certain instances, be delayed due to checks performed by intermediary banks in the USA regarding the compliance of such payments with applicable laws and the verification of any connection between the Seller and persons subject to economic sanctions.

The Parties acknowledge that such delays in the receipt of payments into the Seller’s account are beyond the Parties’ control and do not constitute a Default by the Buyer, provided that the Buyer submits proof of payment (SWIFT MT103) of the Seller’s invoice from the Buyer’s bank.

Thus, the Buyer shall not be liable for any costs or losses incurred by the Seller in connection with delays caused by such checks.

3.5. Documents for delivery by rail

3.5.1. To make payment for delivery by rail, the Seller shall provide the Buyer with the following documents (originals):

• invoice;
• railway consignment notes (RWB);
• a copy of the quality certificate (form No. 42) issued at the time of shipment by rail from domestic elevators to the port terminal, indicating the indicators specified in clause 2.3 of this Contract (issued at the expense of the Seller);
• confirmation of the registration in the Unified Register of Tax Invoices of the preliminary tax invoice for the entire volume of the Goods under this Contract prior to the commencement of the customs clearance procedure;
• a power of attorney issued to the forwarder (for the issuance of EUR.1 or Certificate of Origin and Phytosanitary Certificate) in the original, if necessary;
• certificate of the exporter about the producers of the goods and the region of cultivation (for processing EUR.1 or Certificate of Origin) in the original, if necessary;
• the supplier’s or producer’s declaration for issuing the EUR.1 or the Certificate of Origin, in the original, if necessary;
• a periodic customs declaration, which the Seller is obliged to complete after the commencement of shipment of the railcars for the entire volume of the Contract;
• [additional documents]²²

3.5.2. Other documents may be provided by the Seller at the written request of the Buyer, provided that such documents are related to the export of the Goods and do not contradict the current legislation of Ukraine.

3.6. Documents for delivery by road transport

3.6.1. For payment for delivery by trucks, the Seller shall provide the Buyer with the following documents (originals):

• invoice;
• consignment notes (CMR);
• confirmation of the registration of a preliminary tax invoice for the entire volume of the Goods under this Contract in the Unified Register of Tax Invoices prior to the commencement of the customs clearance procedure;
• a power of attorney issued to the forwarder (for the issuance of EUR.1 or Certificate of Origin and Phytosanitary Certificate) in the original, if necessary;
• certificate of the exporter about the producers of the goods and the region of cultivation (for processing EUR.1 or Certificate of Origin) in the original, if necessary;
• the supplier’s or producer’s declaration for issuing the EUR.1 or the Certificate of Origin, in the original, if necessary;
• copies of test reports for determining safety indicators issued by a certified laboratory;
• a periodic customs declaration, which the Seller is obliged to complete after the commencement of loading of trucks for the entire volume of the Contract;
• [additional documents]²³

3.6.2. Other documents may be provided by the Seller at the written request of the Buyer, provided that such documents are related to the export of the Goods and do not contradict the current legislation of Ukraine.

3.8. Other documents should be provided by the Seller in accordance with the Buyer’s instructions, and which, in any case, is out of payment and do not contradict the local legislation of the country of origin.

3.9. Seller shall obtain and pay for all taxes, duties and levies, present or future to enable the goods to be dispatched to the Place of Delivery and to execute all necessary export customs formalities.

4. Delivery

4.1. Delivery basis — DAP in accordance with the Buyer’s instructions (Incoterms 2020).

4.2. The Place of Delivery: [address]²⁴.

Delivery Period, both dates included: [date]²⁵ — [date]²⁶.

The date of delivery is the date of acceptance of the Goods at the Place of Delivery, as confirmed by the terminal register. The arrival of the Goods is confirmed by an electronic mark in the railway bill or waybill, which is affixed at the Place of Delivery. The acceptance of the Goods is to be confirmed by the register issued by the terminal at the Place of Delivery.

4.3. Delivery is carried out by rail or truck in the Seller’s option. Seller undertakes to conclude freight Contract with the carrier till the Place of Destination and to hand over the Goods to the carrier. The Seller bears all expenses resulting from incorrect entry in transportation bills.

4.4. Each individual railway wagon or truck shall be in a condition suitable for the carriage of the Goods for its acceptance at the Destination, clean and free of foreign odours.

4.5. Seller shall, at its own expense, arrange production of the accompanying documents for the Goods dispatched to the Place of Delivery according to the Buyers’ instructions as set out in clauses 3.4.1 and 3.5.1 of this Contract. Accompanying documents for every vehicle shall be available at the time of arrival of the transport to the Place of Delivery.

4.6. The time and date of the transfer of the risk of accidental damage to the Goods from the Seller to the Buyer is the date the Goods are actually placed at the Buyer’s disposal at the place of delivery. Ownership of the Goods passes to the Buyer on the date of full payment for the Goods.

4.7. If the Seller is not a resident of Ukraine, the Seller confirms that the Goods supplied under this Contract have been purchased directly from the exporter or shall provide documentary evidence of the entire supply chain.

4.8. The Seller shall arrange all formalities for export clearance of the Goods at its own expense. The Seller bears full responsibility for completing export formalities and providing the freight forwarder at the port, the broker, and the Buyer with any export documents required under the Contract. If customs authorities reject and/or delay the customs clearance of the Goods, the Seller bears full responsibility for any consequences arising from such delay or rejection, including, but not limited to: vessel demurrage, the cost of replacing the Goods, and breach of the contract between the Buyer and its customer. The Seller is obliged to reimburse the Buyer for all direct losses caused by this breach within 5 working days from the date the Buyer issues the relevant invoice.

4.9. Seller shall at its own expense conclude the contract for the customs clearance with the forwarding agent and customs broker at the Place of Delivery.

4.10. Seller shall provide the Buyer with the dispatch schedule, including delivery dates of the Commodity.

4.11. The Buyer shall provide the Seller with delivery instructions within 2 business days of receiving the dispatch schedule from the Seller.

4.12. The Seller shall perform the shipment of the Goods in accordance with the Schedule.

4.13. The Seller on a daily basis sends to the Buyer report for the Goods dispatched by e-mail indicating the following information:

• the number of this Contract;
• name of the exporter;
• date of shipment;
• station of departure and station of destination;
• wagon number;
• railway waybill or consignment note number;
• name and weight (gross, tare, net) of the cargo;
• scanned copies of accompanying documents (including Grain Quality Certificate (Form 42), veterinary certificate).

4.14. The Buyer shall arrange confirmation of acceptance and discharge of the transport at the Place of Delivery.

4.15. Special conditions for the shipments by railway wagons

4.15.1. The Seller or his authorized third party shall submit their application to the automated system of the workflow of cargo transportation applications and planning (hereinafter — “AS Mesplan”) administered by the State Administration of Railway Transport of Ukraine “Ukrzaliznytsia” (hereinafter — “UZ”). The date, number of the application and the dispatch station to be advised to Buyers within 1 calendar day.

4.15.2. The Buyer shall arrange confirmation of the application to AS Mesplan by UZ.

4.15.3. Seller shall also submit their application to the Daily dispatch plan (ARM) at least 3 (three) business days before the railway wagons are to be loaded.

4.16. The Seller shall perform shipment in accordance with the Buyers’ instructions.

4.17. The Seller undertakes to provide the Buyer, upon request, with all the necessary documents for obtaining the EUR-1 certificate or the Goods Certificate of Origin (intended for destinations other than the EU), either the Prior Notice, or the LOA, or other document as per requirement of importing country.

4.18. To load the Cargo into the vessel, the Buyer is entitled to dispose the Goods from the moment of delivering the Goods to the Place of Delivery in accordance to this Contract.

5. Responsibility of the Parties

5.1. In case the Seller fails to deliver the full quantity of the Goods within the terms stipulated by the Contract, the Seller shall immediately refund to the Buyer all payments made by the Buyer for the non-delivered Goods. The Seller shall also pay 5% (five per cent) per annum of the amount to be returned, calculated from the date of receipt by the Seller of the payment made by the Buyer until the date of return of the cost of the undelivered Goods. The full amount of such reimbursement must be received by the Buyer in the currency of payment at the Buyer’s account no later than within 5 (five) business days from the moment the Sellers receives the claim for refund.

5.2. The Parties shall indemnify each other only for all direct losses caused by the breach of the obligations under this Contract.

5.3. In case the Buyer fails to pay the full cost of the delivered Goods within the terms stipulated by the Contract, the Buyer shall pay interest of 5% (five per cent) per annum of the amount due, calculated from the first day of delay in payment for the Goods to the date of payment.

6. Force Majeure. Prohibition

6.1. Force Majeure and Prohibition as per Clause 14 of GAFTA Contract No. 78UA.

7. Notices and workflow

7.1. All notices and documents required to be served on the Parties pursuant to this Contract may be communicated in accordance with Clauses 15-16 of GAFTA Contract No. 78UA via the following e-mail addresses:

• the Seller: [emails]²⁹
• the Buyer: [emails]³⁰

8. Default

8.1. The default shall be governed by Clause 17 of GAFTA Contract No. 78UA.

9. Applicable Law

9.1. The law governing this Contract is the laws of England.

9.2. Terms and conditions of GAFTA Contract No. 78UA, in edition valid on the day of concluding this Contract, shall apply to any issues, which are not settled in this Contract. By signing this Contract, the Parties confirm that they are cognizant with and understand terms of GAFTA No. 78UA and they agree to incorporate terms of it.

10. Arbitration

10.1. Any and all disputes arising out of or under this Contract or any claim regarding the interpretation or execution of this Contract shall be determined by GAFTA Arbitration in London in accordance with the GAFTA Arbitration Rules No. 125 in the version in force at the time of the Contract conclusion in case if the seller and the buyer are legal entities incorporated in different countries.

If the seller and the buyer are incorporated in the same country, any dispute arising out of or in connection with this contract shall, at the claimant’s option, be submitted either to the competent Commercial (Economic) Court of that country or to the Arbitration Court of the relevant Chamber of Commerce and Industry in accordance with its applicable rules.

The language of the arbitration proceedings is English.

11. Other Provisions

11.1. This contract is made up in English and Ukrainian languages. In case of discrepancies between English and Ukrainian wording, English shall prevail.

11.2. The Contract shall become effective on the date of signing and shall be valid until complete and due fulfillment of the obligations of the Parties. The Parties agree that this Contract may be signed and executed by electronic signature (including, without limitation, scanned signature, digital signatures and facsimile). Any such electronic signature shall have the same legal force and effect as a handwritten signature and shall be admissible as evidence of the Parties’ agreement.

11.3. When duly concluded, this present Contract will replace all and any other contracts, accepted offers and other types of agreements between the Parties with respect to the Goods that make the subject matter hereof.

11.4. Any amendments and add-ins to this Contract shall be made in writing and signed by both Parties.

11.5. While performing their duties under the Contract, the Parties, their affiliates, personnel, consultants and agents shall not pay, offer or authorize giving any money (other values or benefits), either directly or indirectly, to any persons, in order to influence action or decisions of those persons so as to obtain any unfair advantage or achieve any other unfair purpose. While performing their duties under the Contract, the Parties, their affiliates, personnel, consultants, and agents shall not take any actions qualified by the law which applies for the purposes of this Contract as offering or receiving a bribe, commercial bribery, or actions violating applicable laws and international AML regulations.

11.6. The Parties undertake to comply with all sanctions regulations of Ukraine, the USA, the EU and the EU-member states that impose economic and/or political sanctions. Sanctions as per Clause 4 of GAFTA Optional Clauses Form No. 131.

12. Signature and details of the parties

12.1. The Seller: [company name]³

12.2. The Buyer: [company name]⁵

On behalf of the Seller / Від Продавця: _________________________

On behalf of the Buyer / Від Покупця: _________________________

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