FOB Contract (GAFTA 49)

CONTRACT No. [number]¹

Date: [date]²

The Seller: [company name]³, a legal entity incorporated under the laws of [state]⁴, official address: [address]⁵, represented by [signatory]⁶, on one side, and

The Buyer: [company name]⁷, a legal entity incorporated under the laws of [state]⁸, official address: [address]⁹, represented by [signatory]¹⁰, on the other side,

(Buyer and Seller together further referred to as the “Parties” and “Party” separately)

have concluded the present Contract No. [number]¹ of [date]² (hereinafter — the “Contract”) on the following:

1. Subject matter of the Contract

1.1. In accordance with the provisions of the present Contract, the Seller shall deliver and the Buyer shall accept and pay for the Goods — [commodity]¹¹, origin — [origin]¹², crop [year]¹³, [other essential elements of commodity, if any]¹⁴ (hereinafter — the “Goods”).

2. Quantity

2.1. [amount]¹⁵ metric tons +/- [tolerance]¹⁶ % at the Buyer’s option.

2.2. The quantity shall be final at time and place of loading as per the Certificate of Weight issued by a GAFTA-approved surveyor at the Seller’s choice and expense. Weight to be determined based on official shore scale figures in accordance with GAFTA Weighing Rules No. 123.

2.3. The Buyer has the right to nominate a GAFTA-approved surveyor at their own choice and expense to supervise weighing and/or loading operations at the port of loading. The Seller shall ensure full access of the Buyer’s surveyor to the weighing and/or loading operations.

3. Quality of the Goods

3.1. Quality specification: [quality parameters]¹⁷

3.2. The Goods shall be of sound, loyal and merchantable quality, free from alive insects and foreign smell, with natural color, not moldy, not musty.

3.3. Quality, condition and description of the Goods shall be final at the time and place of loading as per the Certificate of Quality issued by a GAFTA-approved surveyor at the Seller’s choice and expense. The Buyer has the right at their own cost to be present or represented at the loading port and/or have the right to take samples co-jointly, but not to interfere with the loading. The Seller is not obliged to stop the loading due to the absence of the Buyer’s surveyor. In any case Seller’s survey certificates are final and binding.

Sampling, Analysis and Certificates of Analysis as per GAFTA 124.

4. Delivery Basis

4.1. FOB, stowed, trimmed and fumigated, one safe port / one safe berth, [port]¹⁸, [country]¹⁹, always afloat and always accessible.

5. Price

5.1. The price of the Goods is [currency]²⁰ [sum]²¹ ([sum in words]²²) per metric ton.

5.2. The total value of the Goods is [currency]²⁰ [sum]²³ ([sum in words]²⁴) +/- [tolerance]¹⁶ %.

6. Delivery Period

6.1. Between the [day]²⁵ and the [day]²⁶ of [month]²⁷ [year]²⁸, both dates included, at the Buyer’s option.

7. Vessel Nomination / Pre-Advice

7.1. The Buyer shall send to the Seller a notice of vessel nomination / pre-advice not later than 5 (five) calendar days before the estimated date of arrival of the vessel at the loading port with the following information:

7.1.1. vessel’s IMO number, name and flag;

7.1.2. vessel’s dimensions (including airdraft);

7.1.3. vessel’s deadweight;

7.1.4. cargo capacity of holds (total and per each hold);

7.1.5. ETA to the port of loading;

7.1.6. country of destination;

7.1.7. demurrage and despatch rates;

7.1.8. [Specify others if necessary]³⁰

7.2. The Buyer and/or the Buyer’s agent should send to the Seller and/or their agent 2-3 days and 24 hours’ notice of the vessel’s expected arrival at the loading port.

8. Documentary Instructions

8.1. The Buyer shall give full and final documentary instructions to the Seller upon the vessel’s nomination, but in any case not later than 1 (one) business day prior to the vessel’s arrival at the port of loading. Such instructions shall contain information on the exact quantity of the Goods to be loaded on board of the vessel, complete instructions for issuance of all contractual documents and the details of the Buyer’s bank.

8.2. Drafts of the shipping documents to be confirmed by the Buyer within 2 (two) business days upon presentation via email, but in any case, before completion of loading.

8.3. If the Buyer fails to confirm drafts of the shipping documents in due time, the drafts will be considered approved, and the Seller has the right to issue the shipping documents on the basis of final drafts’ version sent to the Buyer, arranged in compliance with the Buyer’s instructions and this Contract. Upon the Buyer’s instructions, the Seller shall arrange re-issuance (in case if possible by issuing party) of the shipping documents at Buyer’s account, time and responsibility.

8.4. All shipping documents shall be issued in English or in dual/multiple languages, one of which shall be English. Documents issued by official authorities may not contain any additional information apart from what is permitted by current regulations in the country of origin.

9. Loading

9.1. The vessel shall be loaded at the Seller’s expense and risk at an average loading rate of [amount]²⁹ metric tons within 24 consecutive hours of a weather working day with Saturdays, Sundays, Holidays excluded even if used. Holidays as per BIMCO calendar latest edition.

9.2. The vessel’s NOR shall be tendered to the Seller or to the Seller’s agent at the port of loading between 08:00 and 17:00 hours local time on all days except for Saturdays, Sundays, and Holidays. NOR to be tendered after the vessel’s arrival at the port of loading WIPON, WIFPON, WICCON, WIBON. Any notice received after 17:00 hours shall be deemed to have been received on the following business day.

9.3. Laytime shall commence at 08:00 am the next working day after tendering a valid NOR. Time from Friday 17:00 (or at 17:00 of the day preceding the official holiday) till the following Monday at 08:00 am (or at 08:00 am on the day following the official holiday) not to count, even if used. All other terms and conditions as per the relevant Charterparty.

9.4. Vessel agent at the loading port to be appointed by the Seller and advised upon vessel nomination confirmation. Agent is as per official, in any case competitive, tariff.

9.5. Demurrage and despatch rate as per the relevant Charterparty.

Once on demurrage, always on demurrage.

Demurrage shall be paid by the Seller within [term]³³ days after the presentation of the Buyer’s respective invoice and supporting documents (SOF, NOR and confirmed laytime calculation).

Despatch shall be paid by the Buyer within [term]³³ days after the presentation of the Seller’s respective invoice and supporting documents (SOF, NOR and confirmed laytime calculation).

10. Payment

10.1. 100% value of the Goods without any deduction/offset/counterclaims shall be paid within [term]³¹ banking days against presentation to the Buyer of scan copies of the shipping documents listed below, but in any case before breaking bulk.

It is clear to Buyers and Sellers that the timely payment is a condition of the Contract.

10.2. Shipping documents shall include:

1. the Seller’s Commercial invoice signed and sealed;
2. full set of 3/3 originals bills of lading, marked “clean on board” and marked “Freight Prepaid” or “Freight Payable as per CP” plus 3 (three) non-negotiable copies;
3. Certificate of origin issued by local Chamber of Commerce or EUR-1 Certificate issued by official authorities in the country of origin of the Goods as per Buyer’s instructions;
4. Holds Cleanliness Certificate issued by a GAFTA-approved superintendent/surveyor company at the Seller’s choice and expense;
5. Quality Certificate issued by a GAFTA-approved superintendent/surveyor company;
6. Weight Certificate issued by a GAFTA-approved superintendent/surveyor company at the Seller’s choice and expense;
7. Phytosanitary certificate issued by competent authorities in the country of origin of the Goods;
8. Non-radiation certificate issued by a GAFTA-approved superintendent/surveyor company at the Seller’s choice and expense;
9. Fumigation certificate issued by a GAFTA-approved superintendent/surveyor company at the Seller’s choice and expense;
10. Hatches Sealing Certificate issued at loading by a GAFTA-approved superintendent/surveyor company at the Seller’s choice and expense;
11. Master’s Receipt, stating 1 (one) non-negotiable copy of Bill of Lading is on board the vessel;
12. [Specify others if necessary]³²

10.3. Third-party documents (except commercial invoices) are acceptable. E-certificates are acceptable if such mentioned by Buyers in DI.

10.4. All banking costs/commissions of the Seller’s bank and its correspondent(s) are for the Seller’s account, and all banking costs/commissions of the Buyer’s bank and its correspondent(s) are for the Buyer’s account.

10.5. Payment from a third party is acceptable.

10.6. The Buyer has no right to commence discharging operations until the payment is received in full to the Seller’s bank account. After receipt of 100% of the value of the loaded Goods, the Seller will tender the originals of the shipping documents to the Buyer in accordance with the Buyer’s instructions.

10.7. In absence of the original documents at the port of discharge, upon receipt of the full price for the Goods, the Seller shall allow discharging operations against a letter of indemnity (in P&I Club’s wording) provided by the Seller/charterer of the vessel and countersigned by the Buyer/receiver, if necessary. This shall not cause any prejudice to the Buyer’s right to receive the full set of original shipping documents, including the original bills of lading, under this Contract.

11. Fumigation

11.1. The Seller to fumigate the cargo by the Seller’s appointed GAFTA-recognized fumigation company, at the Seller’s cost, using Aluminium Phosphide tablets in accordance with the GAFTA fumigation rules. In the event specific fumigation methods/types are requested by the Buyer such as recirculation and/or sleeves, then the additional costs of such fumigation method/type is for the Buyer’s account at loading, including the costs and time for removal and utilization of the fumisleeves and/or recirculation equipment at discharging.

12. Insurance

12.1. Insurance to be covered by the Buyer at its own risk and costs, from the moment the Goods pass the Vessel’s rail at loading.

13. License, Duties and Taxes

13.1. Any loading port / country of origin export license, duties and taxes on cargo shall be for the Seller’s account.

13.2. Any port of discharge / country of destination import license, duties and taxes on cargo shall be for the Buyer’s account.

14. Risk / Title

14.1. Risk of damage/loss of the Goods shall pass from the Seller to the Buyer from the moment the Goods pass ship’s rail at loading port.

14.2. Title to the Goods shall pass from the Seller to the Buyer upon 100% of the cargo value is credited at the Seller’s account.

15. Sanctions

15.1. The Seller and the Buyer shall comply with all binding resolutions, trade, economic and/or financial sanctions and/or embargoes applicable to performance by that Party of its obligations under this Contract (“Sanctions”).

15.2. Neither the Seller nor the Buyer shall do, or omit to do, any act which causes the other Party to be in breach of any Sanctions.

15.3. The Seller has the right to reject any destination, transit country, vessel, document, payment, person or entity, and the Buyer has the right to reject any country of origin, vessel, document, payment, person or entity that would, in each case, cause the Seller or the Buyer (respectively) to breach any Sanctions.

15.4. The Seller agrees that the Goods will not directly or indirectly originate from, be provided by, or be transported in a vessel, or with any carrier, owned, operated, controlled, flagged or chartered by any country, person or entity which would cause the Buyer to breach Sanctions.

15.5. The Buyer agrees that the Goods will not be resold to, or transit through a destination, person or entity, or be transported on a vessel or with a carrier owned, operated, controlled, flagged or chartered by any country, person or entity which would cause the Seller to breach Sanctions.

15.6. The Seller and the Buyer agree to co-operate with any requests for information made by the other Party, to the extent reasonably necessary for that Party to verify compliance with this Clause.

15.7. Where either Party (“Defaulting Party”) does, or omits to do, any act which causes the other Party (“Non-Defaulting Party”) to be in breach of any Sanctions, the Non-Defaulting Party may by written notice immediately terminate this Contract without any further liability to the Defaulting Party, however without affecting any other shipment or contract. Such termination shall be without prejudice to any rights and obligations existing prior to termination.

15.8. Defaulting Party shall indemnify and hold the Non-Defaulting Party fully harmless in the event of loss or damage suffered by the Non-Defaulting Party, its principals or affiliates, as a result of any breach, whether intentional or not, of the above-mentioned Sanctions by the Defaulting Party.

16. Confidentiality

16.1. The Parties shall treat the terms of this Contract as strictly confidential and shall not disclose them to third parties except:

• 16.1.a. where necessary for enforcement or compliance purposes;
• 16.1.b. to legal, accounting, or financial advisors bound by confidentiality; or
• 16.1.c. as required by applicable law or regulation.

17. Governing Contract, Governing Law and Arbitration

17.1. All other terms, conditions, and rules, not in contradiction with the terms stipulated herein, contained in GAFTA Standard Contract No. 49 in the edition effective at the date of this Contract. The Parties hereby confirm their knowledge and understanding of the abovementioned terms, conditions, and rules.

17.2. This Contract shall be governed, construed, and take effect in accordance with the laws of England and Wales.

17.3. Any and all disputes arising out of or under the present Contract or any claim regarding the interpretation or execution of the present Contract shall be determined by arbitration in accordance with GAFTA Arbitration Rules No. 125 or No. 126, depending on the amount of the arbitration claim, both in the edition current at the date of this Contract; such Rules are incorporated into and form part of this Contract and both parties hereto shall be deemed to be fully cognisant of and to have expressly agreed to the application of such Rules. Where all the arbitration claims under the sales contract are in excess of the amount of EUR 60,000 Rules 125 shall apply; if all such claims are below EUR 60,000 the arbitration shall be conducted in accordance with GAFTA 126 Rules.

The Parties have agreed that they may engage legal representatives (i.e. a solicitor and a barrister, or other legally qualified advocate, or advisor, wholly or principally engaged in private practice), to represent them in the arbitration and/or in any appeal proceedings and to appear on their behalf at any oral hearings. The Parties agreed that the costs of engaging representatives shall be reimbursed by the guilty Party.

17.4. Language of the proceedings — English. Arbitration shall take place in London, England.

18. Final Terms

18.1. This Contract is made in two copies, having equal legal force, one original for each Party. This Contract is executed in two languages, English and Ukrainian. In the event of any discrepancy, inconsistency or divergence in interpretation between the two versions, the English language version shall prevail. The validity of this Contract will not be affected by the non-return of the counter confirmation duly signed.

18.2. Scanned and emailed copies of this Contract signed by both Parties shall be valid. The Parties hereby represent and warrant to each other that the individuals, whose signatures appear in this Contract, have full legal and valid power and authority vested upon them by each respective Party to execute this Contract for and on behalf of such Party, and each Party further confirms and agrees that this Contract is entered into in reliance on such representation.

19. Legal addresses and requisites of the Parties

19.1. The Seller: [company name]³

Address: [address]⁵

Seller’s Bank: [details]³⁴

Director: [name]³⁵

19.2. The Buyer: [company name]⁷

Address: [address]⁹

Buyer’s Bank: [details]³⁶

Director: [name]³⁷

On behalf of the Seller / Від Продавця: _________________________

On behalf of the Buyer / Від Покупця: _________________________

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