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16) Reference the binding nature of the contract, and amendments to it, on the 

 parties involved and their heirs, personal representatives and successors. 



17) A reference to the assignability of the contract. 



Importantly, have the producer/seller sign the contract as soon as possible. 



▲ Does the Contract Need Updating? Several grain purchase contracts 

 currently in use contain outdated provisions. One of the most common is a 

 requirement that the producer notify the buyer of all hens on grain being sold. Under 

 the so-called "Clear-Title Lien Law" (Section 1324 of the Food Security Act of 

 1985) - which preempted existing state law ~ the obligation to provide notification 

 of the existence of liens shifted to the creditor through the use of direct notice or 

 through central notification systems adopted pursuant to the federal law. Thus, 

 producers no longer are required to notify the buyer of the existence of liens; nor are 

 buyers obligated to "search" for liens. Buyers should be alert that outdated 

 contractual language may weaken the rights granted to them under federal law. The 

 NGFA's Sample Grain Purchase Contract and Sample Grain Purchase Confirmation 

 Memorandum contain up-to-date clauses that reflect current law, 



A Is the Contract Balanced and Fair to the Producer? Review your existing 

 grain purchase contract to determine if any unreasonable terms or conditions placed 

 on the producer can be deleted while at the same time providing adequate protection 

 to the grain buyer. Unreasonable terms may decrease the grain firm's credibility in 

 the eyes of the producer. In fact, such contract terms may cause that producer to 

 believe the grain firm is treating him less than fairly and actually encourage breach 

 of the contract by the producer. 



A Is it Advisable to Include a Force Majeure Clause? Numerous grain 

 purchase contracts in use contain "force majeure clauses" that relieve the buyer of 

 performing on the contract for various causes. Some of these force majeure clauses 

 cited arather expansive list of causes that would relieve the buyer from performance. 



The disadvantage of including a "force majeure" clause in a grain purchase 

 contract with producers is that if a dispute arises that involves nondelivery of grain 

 by the producer, a court examining the contract may be inclined to allow such 

 nonperformance if the contract itself allows similar nonperformance by the buyer for 

 any number of reasons that are outside of the buyer's ability to control. For instance, 

 a contract containing a force majeure clause that relieves a buyer from accepting 

 delivery of grain from a producer because of an "act of God" may be used against 

 the buyer if the producer is unable to deliver grain because of a similar occurrence 

 or situation, such as drought. For this reason, the NGFA's Sample Grain Purchase 

 Contract contains a clause that delays — but does not totally relieve ~ the buyer from 

 taking delivery of grain from the producer if caused by reasons beyond the buyer's 

 control. 



