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Forward Sale Agreement for the United States

Forward Sale Agreement Template for United States

A Forward Sale Agreement is a legally binding contract governed by US law that establishes terms for the sale of specific goods or commodities at a predetermined price, with delivery and payment occurring at a future date. The agreement is subject to federal regulations including the Uniform Commercial Code and Commodity Exchange Act, and may also fall under CFTC oversight. It typically includes detailed specifications about the product, pricing mechanism, delivery terms, and risk allocation between parties.

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What is a Forward Sale Agreement?

Forward Sale Agreements are essential tools in US commerce for managing price risk and securing future supply/delivery commitments. These agreements enable businesses to lock in prices and terms for future transactions, providing certainty in volatile markets. Typically used in commodities, manufacturing, and agricultural sectors, a Forward Sale Agreement includes specific details about quantity, quality, price, delivery terms, and risk allocation. The agreement must comply with US federal and state regulations, including the UCC and CFTC requirements where applicable.

What sections should be included in a Forward Sale Agreement?

1. Parties: Identification and details of the buyer and seller

2. Background: Context and purpose of the forward sale agreement

3. Definitions: Key terms used throughout the agreement

4. Subject Matter: Description of goods/commodities being sold

5. Price and Payment Terms: Purchase price, payment schedule, and method

6. Delivery Terms: Timing, location, and method of delivery

7. Representations and Warranties: Statements of fact and assurances by both parties

8. Term and Termination: Duration and conditions for ending the agreement

What sections are optional to include in a Forward Sale Agreement?

1. Force Majeure: Provisions for unforeseeable circumstances preventing performance of contractual obligations

2. Security Arrangements: Provisions for collateral or security arrangements to mitigate credit risk

3. Quality Specifications: Detailed specifications for product quality standards and compliance requirements

What schedules should be included in a Forward Sale Agreement?

1. Delivery Schedule: Detailed timeline and logistics for product deliveries

2. Price Calculation Methodology: Detailed formula or methodology for determining the final price

3. Product Specifications: Technical specifications and requirements for the goods/commodities

4. Quality Testing Procedures: Detailed procedures for quality verification and testing protocols

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Document Type

Purchase Agreement

Cost

Free to use
Clauses

































Industries

Uniform Commercial Code (UCC): Primary federal framework governing commercial transactions, especially Article 2 (Sale of Goods) and Article 9 (Secured Transactions)

Commodity Exchange Act (CEA): Federal legislation regulating commodity futures trading and markets in the United States

Securities Act of 1933: Federal law governing the registration and regulation of securities, relevant if the forward contract could be classified as a security

Securities Exchange Act of 1934: Federal law establishing the SEC and regulating secondary trading of securities

CFTC Regulations: Regulatory framework established by the Commodity Futures Trading Commission for derivatives markets

SEC Rules: Regulatory requirements established by the Securities and Exchange Commission, applicable if the forward contract is deemed a security

Dodd-Frank Act: Wall Street Reform and Consumer Protection Act providing regulatory framework for financial markets and consumer protection

State UCC Variations: State-specific adoptions and modifications to the Uniform Commercial Code

State Contract Laws: Various state-specific laws governing contract formation, enforcement, and remedies

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities

Bankruptcy Code: Federal laws governing bankruptcy proceedings and creditor rights

Internal Revenue Code: Federal tax laws affecting the treatment of forward contracts and related transactions

Antitrust Laws: Federal and state laws preventing anti-competitive business practices

Banking Regulations: Federal and state banking laws applicable when financial institutions are involved in forward contracts

Industry-Specific Regulations: Specialized regulations depending on the underlying asset (agriculture, energy, mining, environmental)

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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