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August 15, 1990 



Memorandum To: Recipients of "Sample Grain Purchase 



Contract" and "Sample Grain Purchase 

 Confirmation Memorandum" © 



From: National Grain and Feed Association 



The enclosed "Sample Grain Purchase Contract" and "Sample Grain Purchase 

 Confirmation Memorandum" have been developed by the National Grain and Feed 

 Association as a service for its member companies. 



These sample documents are designed to be useful to country elevators and 

 other grain and feed companies that purchase grain from producers. 



The genesis of the Sample Contract and Confirmation Memorandum was the 

 1988 drought. In the aftermath of the worst drought in half a century, some elevators 

 discovered that their contracts were inadequate to protect against nondelivery of 

 grain that had been purchased from producers through forward contracts. In other 

 cases, elevators found their contracts did not provide adequate specificity concern- 

 ing the quality of the grain to be delivered, as well as the premiums and discounts 

 to apply. In other cases, there were no provisions in the contracts for arbitration to 

 apply if disputes arose. 



Given these experiences, the NGFA's Country Elevator Committee embarked 

 on a'major project to evaluate existing grain purchase contracts with producers. The 

 goal - the achievement of which is represented by the enclosed documents ~ was 

 to devise a sample contract and memorandum that grain firms could use to evaluate 

 the adequacy of their own contractual documents. 



The Sample Contract and Confirmation Memorandum 



-How and How Not to Use- 

 in this vein, it is important to stress that the "Sample Grain Purchase Contract" 

 and "Grain Purchase Confirmation Memorandum" are not intended to be used 

 verbatim by grain firms. Rather, they are designed to be starting points for 

 companies to evaluate the adequacy of their existing contracts and confirmation 

 memorandums. Carefully examine each of the provisions contained in the Sample 

 Grain Purchase Contract and Sample Confirmation Memorandum before incorpo- 

 rating them into your firm's grain purchase documents. 



1201 New York Ave., N.W., Suite 830 # Washington, D.C., 20005 # (202)289-0873 



