Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 2°C

ESTD 1874 Search

Farming opinion: Contract shortfalls

06:00 14 May 2014

Dermott Thomas

Dermott Thomas

PAGEPIX LTD 07976 935738

The majority of farmed crop in this country is grown to contract with something like ¾ of UK potato crop grown on pre-season contract for a committed buyer, write Dermott Thomas, partner and specialist litigator/advocate at Barker Gotelee.

shares

These contracts are generally drawn up by the buyers and therefore include terms favourable to buyers in the event of anything going wrong.

It is therefore usual for such contracts to commit the grower to supply a certain quantity or tonnage rather than by reference to yield from particular fields grown and the contract will contain quality criteria allowing the purchaser to reject at delivery again at the risk of the grower.

Other frequently encountered supporting terms include an agreement by the seller to indemnify the purchaser for any losses, clauses stipulating time of delivery to be of the essence whilst allowing the purchaser to vary the times and entire agreement clauses excluding the Court from taking into account extraneous circumstances for instance the fact that the grower may be subject to natural vagaries such as the weather.

Although a force majeure clause included in the contract drafted by a purchaser at first flush seems to favour the grower effectively excusing a short supply if it arises from matters beyond the grower’s control or caused through no fault of his, this simply reflects the default position where in the absence of a contract the grower would be excused under the common law. The idea of these clauses when drafted by the purchaser therefore is to restrict as far as possible the excusing circumstances.

Unless part of a bigger organisation most growers have no possibility of re-negotiating the terms of contract.

The effect of the terrible growing conditions in 2012 has brought into sharp focus these type of contracts where shortfalls were the rule rather than the exception.

For many the general spirit of co-operation pervading the agricultural world has meant that losses have been mitigated or swept up in future trades, however the extent of losses suffered by some has meant that these onerous buyer contracts are being tested to the extreme in the Courts.

Most commodity contracts also contain an arbitration clause committing the parties to arbitrate their differences before seeking any redress at Court. Arbitration usually works out as a cheaper alternative to Court proceedings, however the identity of the arbitrator is also dependent on the purchaser’s trade body and there must always remain a doubt as to impartiality where the arbitrator is dependent on work arising from his panel status with the trade body.

Maintaining a dialogue and being imaginative in suggestions for settlement is therefore invariably the best option and of the alternative dispute resolution processes mediation where the parties are assisted toward a negotiated solution is invariably the best solution.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

James Fairweather has been found guilty of murdering Nahid Almanea and James Attfield

The Colchester teenager convicted of murdering James Attfield and Nahid Almanea in Colchester in 2014 must serve a minimum of 27 years in jail.

USAF fighter planes from RAF Lakenheath taken from a C130 Hercules

Almost £250,000 has been paid out in compensation for damage, injuries and loss of livestock caused by low flying military aircraft in East Anglia over the past five years, figures show.

Stock image.

Emergency services have been called to a two-vehicle crash in a village on the Suffolk/Essex border.

A body has been found in a flat in The Street in Bramford.

A man found dead in his flat after failing to turn up for work has been named locally.

Braintree players (L to R) Sim Akinola, Sean Long, Mitch Brundle celebrate victory at Wrexham

Part-timers Braintree Town could secure a place in the National League play-offs if they can manage a draw or better against Altrincham tomorrow.

Firefighters at the scene of a fire at The George, Wickham Market, in 2013

Fresh calls for answers as to the future of a medieval Suffolk pub have been issued after more than 200 people turned out to a public meeting on the matter last week.

Stock image of police road closed sign.

A Suffolk woman has died during a car crash which left a man and a baby in hospital.

Most read

Great Days Out

cover

Click here to view
the Great Days Out
supplement

View

Most commented

HOT JOBS

Show Job Lists

Streetlife

Newsletter Sign Up

Great British Life

Great British Life
MyDate24 MyPhotos24