Commodity Contract Clause Library
A searchable library of standard bulk commodity contract clauses | quality determination, price adjustment, payment, delivery, shipping and compliance | each with a drafting note on what to watch out for.
Quality and weight as determined by an independent internationally recognised inspection company mutually agreed between the parties at the load port at the time of loading shall be final and binding on both parties for invoicing and settlement purposes, save in the case of fraud or manifest error. The cost of such inspection shall be shared equally between Seller and Buyer. Buyer shall be entitled to appoint its own surveyor at its own cost to attend loading and to witness sampling and analysis.
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Overview & methodology
What are commodity contract clauses?
| Clause | Applicable framework | Drafting check |
|---|---|---|
| Quality determination | GAFTA or FOSFA form if incorporated | Specify sampling, laboratory and finality of certificates. |
| Price adjustment | Negotiated benchmark clause | Name the index, quotation window and quality adjustment. |
| Delivery and risk | Incoterms 2020 if incorporated | State the rule, named place or port and edition. |
| Payment documents | UCP 600 if the credit incorporates it | Align document wording and presentation dates with the credit. |
| Laytime and demurrage | Agreed sale or charter terms | Define time counting, exceptions and agreed daily charges. |
| Dispute resolution | Chosen GAFTA or FOSFA arbitration rules | Confirm governing law, forum and applicable time limits. |
Numerical Example: Quality Adjustment Clause
Illustrative negotiated penalty, not a market quote. Example for an Iron Ore shipment where the price is adjusted downwards due to a 0.5% shortfall in iron content compared to the basis grade.
Drafting Bulk Commodity Contracts
Most bulk commodity disputes trace back to a handful of recurring clauses | where quality is determined, how price adjusts for quality variance, how payment is secured, and who bears risk at each stage of the voyage. This library collects standard drafting for each of those points, with the practical trade-offs behind the wording. Use it as a starting point for negotiation, not as a substitute for legal review.
Related tools: Incoterms Documents, UCP 600.
Method note: calculations run in your browser using the formulas and published rule books cited on this page. Results are free estimates for planning, with no login required, and should be confirmed with your bank, broker or the official source before you commit.
Frequently asked questions
What are GAFTA and FOSFA contract clauses?
GAFTA (Grain and Feed Trade Association) and FOSFA (Fertiliser and Agricultural Trade Association) publish standard form contracts and model clauses for their respective commodities. These clauses cover quality standards, price adjustments, laytime, and dispute resolution. Using them provides legal certainty and is often required by trade finance banks.
Why do I need a price adjustment clause?
Price adjustment clauses tie the contract price to published benchmarks (Platts, Argus, CBOT, etc.) that fluctuate daily. Without one, price disputes are common. Clauses specify the reference price, timing (e.g., average of days 1 to 5 after discharge), and whether the seller or buyer bears price risk.
What is a laytime clause?
Laytime is the period allowed for loading and discharging bulk cargo, typically expressed in working days or calendar days. The clause specifies demurrage (daily penalty if laytime is exceeded) and despatch (credit if completed early). Disputes over laytime calculation are common and costly.
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