GAFTA Contract Form No. 100: Bulk Feedingstuffs, CIF and C&F Sales, Shipping Documents, Discharge, and Arbitration

GAFTA Contract Form No. 100: Bulk Feedingstuffs, CIF and C&F Sales, Shipping Documents, Discharge, and Arbitration

GAFTA Contract Form No. 100 is a standard form issued by The Grain and Feed Trade Association for the shipment of feedingstuffs in bulk on Tale Quale terms using CIF, CIFFO, C&F, or C&FFO pricing structures. The version examined here states that it is effective from 1 April 2012. Its clauses create a detailed commercial framework covering the goods, contractual quantity, price and destination, quality, shipment, ship nomination, appropriation, documentary payment, discharge, weighing, insurance, force majeure, default, insolvency, English law, and GAFTA arbitration.

The form is designed for international commodity sales in which performance depends on a close relationship between the sale contract and the physical carriage of bulk cargo. The seller must arrange shipment in accordance with the agreed terms, while the buyer receives contractual rights relating to documentary tender, cargo quality, delivery, weighing, insurance where applicable, and remedies for delay or default.

Although the form refers to familiar trade expressions such as CIF and C&F, its own contractual wording is decisive. Clause 29 expressly excludes Incoterms unless the contract states otherwise. The parties should therefore read the GAFTA form as a self-contained contractual regime rather than assuming that external Incoterms rules automatically supplement or replace its provisions.

Form No. 100 also contains important machinery for situations in which the shipping documents do not arrive in time. The payment provisions allow alternative documents or a Letter of Indemnity (LOI) to facilitate cargo delivery, but the contractual rights connected with the eventual shipping documents are preserved. This makes the form particularly relevant to the interaction between commodity trading, Bills of Lading (B/Ls), banking channels, cargo delivery, and maritime risk allocation.

Parties, Brokers, and the Contractual Framework

The opening section identifies the sellers, buyers, and any brokers intervening in the transaction. The contract then operates through a series of standard clauses that can be completed or modified by inserting the commercial particulars applicable to the individual trade.

The form expects the parties to specify the commodity, quantity, price, destination, shipment period, quality warranty where applicable, loading origin, and other transaction-specific details. Certain alternatives are marked for deletion or selection depending on whether the sale is concluded on CIF, CIFFO, C&F, or C&FFO terms.

Because the form incorporates other GAFTA rules by reference, the contractual structure extends beyond the printed clauses. GAFTA Weighing Rules No. 123, GAFTA Sampling Rules No. 124, and GAFTA Arbitration Rules No. 125 are expressly brought into the contractual framework where the relevant clauses apply.

Goods Must Be Identified as Bulk Feedingstuffs

Clause 1 requires the contractual goods to be identified and provides that they are shipped in bulk.

The clause also deals with broken cakes or meal arising through the characteristics of the commodity and the methods used for handling. Such material is to be treated and paid for as part of the contractual goods rather than automatically regarded as a separate deficiency.

Where the word “cakes” is used in the form, it is treated as referring to the goods of the contractual description rather than limiting the contract to one particular physical presentation.

The Contract Quantity Includes Defined Margins

Clause 2 establishes a contractual quantity subject initially to a margin of 2% more or less.

The sellers also have an option to ship a further 3% more or less than the contract quantity. In practical terms, this creates a possible total shipment variation extending to 5% above or below the stated quantity, subject to the settlement mechanism written into the form.

The portion exceeding the initial 2% margin, or the deficiency beyond that initial margin, is settled on the relevant shipment quantity using market value on the last day of discharge of the ship at the destination port. The market value is determined by agreement or, failing agreement, by arbitration.

If the sellers exercise the option to ship up to 5% more than the contractual quantity, the excess above the initial 2% is paid provisionally at the contract price. A later final invoice adjusts the difference between the contract price and the market price determined under the clause.

Where the contract is performed through more than one shipment, each shipment is treated as a separate contract for the operation of the relevant provisions, but the margin applicable to the mean contractual quantity is not changed merely because performance is divided among several shipments.

Price and Destination Depend on the Selected Trade Term

Clause 3 requires the price to be stated per tonne of 1,000 kilograms gross weight and the destination to be identified.

The form provides alternative pricing bases corresponding to cost, insurance and freight; cost, insurance and freight free out; cost and freight; and cost and freight free out.

For clarity in modern terminology, references in this article to the traditional CIF (Cost, Insurance, and Freight) expression are written as CIF (Cost, Insurance, and Freight). The contract itself also distinguishes between CIF/CIFFO and C&F/C&FFO when allocating insurance and discharge responsibilities.

The “free out” alternatives become especially important under the discharge clause because CIFFO and C&FFO place the discharge cost on the buyers under the form.

Brokerage Is Payable on the Mean Contract Quantity

Clause 4 allows the brokerage rate to be inserted on a per-tonne basis.

Brokerage is payable by the sellers on the mean contract quantity whether the goods are lost or not and whether the contract is fulfilled or not, except where non-fulfilment results from cancellation under the Prohibition Clause or Force Majeure Clause.

Normally, brokerage becomes due when the shipping documents are exchanged. If the goods are not appropriated, the form instead makes brokerage due on the 30th consecutive day after the last day available for appropriation.

Quality Can Be Governed by Warranty or Final Inspection

Clause 5 provides alternative methods for establishing contractual quality.

The parties may use a quality warranty measured at the time and place of discharge, or they may select an official certificate of inspection at the time of loading into the ocean-carrying ship as final regarding quality.

Where a warranty structure applies, the form contains detailed allowances and rejection thresholds designed to convert measurable quality deficiencies into price adjustments rather than automatically allowing rejection of the entire shipment.

Oil and Protein Deficiencies Produce Graduated Allowances

Where the contract uses the stated combined oil-and-protein warranty, the goods are to contain not less than the agreed percentage and not more than 1.50% sand and/or silica.

If the combined oil and protein content falls below the warranted percentage, the buyer receives allowances calculated according to a graduated scale.

The first three units of deficiency each attract an allowance of 1% of the contract price. The fourth and fifth units each attract 2%. Each unit beyond five attracts 3%, with proportional adjustment for fractions of a unit.

Where the warranted oil-and-protein content is expressed as a range, such as 40%/42%, no allowance applies if the result remains at or above the minimum. If the analysis falls below the minimum, the deficiency allowance is calculated from the mean of the warranted range rather than solely from its lower figure.

Sand and Silica Are Subject to Allowance and Rejection Thresholds

For sand and/or silica exceeding the stated warranty, the buyer receives an allowance equal to 1% of the contract price for each unit of excess, with proportional treatment for fractions.

If the cargo contains more than 3% sand and/or silica, the buyers are entitled to reject the affected goods. The contract becomes null and void for the rejected quantity rather than automatically for the entire transaction.

Castor Seed and Castor Seed Husk Are Treated Separately

The goods are warranted free from castor seed and castor seed husk, but the form allows limited acceptance where the analysis identifies only small quantities of castor seed husk.

If the content does not exceed 0.001%, the allowance is 0.75% of the contract price. If it does not exceed 0.002%, the allowance becomes 1%. If it does not exceed 0.005%, the allowance becomes 1.50%.

If the first analysis shows no castor seed or husk, that result is final. If the first analysis detects castor seed husk, either party can request analysis of a second sample, in which case the mean of the two analyses becomes final.

Where castor seed husk exceeds 0.005%, the buyers may reject the affected parcel. If they elect to retain it, they are entitled to an additional allowance for the excess, determined by agreement or arbitration.

For sampling and analysis purposes, each mark is treated as a separate shipment, and the contractual right of rejection is limited to the parcel or parcels shown to be defective.

Quality Differences Are Normally Resolved Through Allowance or Arbitration

A quality difference does not automatically allow the buyer to reject the shipment except where the form expressly gives a rejection right or where rejection follows from an arbitration or appeal award under the applicable GAFTA arbitration machinery.

The contract also requires shipment to be made in good condition.

The Shipment Period Is Proved Primarily by the Bill of Lading Date

Clause 6 requires the shipment period to be stated by reference to the date or dates of the Bills of Lading (B/Ls).

The Bills of Lading (B/Ls) must be dated when the goods are actually on board. In the absence of contrary evidence, the Bill of Lading (B/L) date is accepted as proof of the shipment date.

For a month containing an odd number of days, the middle day is treated as belonging to both halves of the month for contractual timing purposes.

Named-Ship Sales Modify Certain Standard Provisions

Clause 7 provides additional rules where the sale is concluded by a named ship.

The position of the named ship is mutually agreed by buyers and sellers. The contract also requires the word “now” to be inserted before “classed” in the Shipment and Classification Clause.

If the sale is made on a “shipped” basis, the Appropriation Clause is cancelled because the carrying ship has effectively already been identified through the transaction.

The Carrying Ship Must Meet the Classification Requirement

Clause 8 requires shipment from the agreed origin, directly or indirectly and with or without transhipment, by first-class mechanically self-propelled ships suitable for the carriage of the contract goods.

The ship must be classed in accordance with the Institute Classification Clause of the International Underwriting Association in force at the time of shipment.

C&F and C&FFO Sales Require Ship Nomination

Clause 9 applies specifically to contracts concluded on C&F or C&FFO terms.

The sellers must nominate the intended carrying ship to the buyers by the agreed date and, in all cases, before loading begins.

The sellers can substitute a nominated ship provided the replacement complies with the requirements of the clause.

The Shipment Period Can Be Extended by Up to Eight Days

Clause 10 gives sellers a defined extension mechanism where the original shipment period is 31 days or less.

The shipment period can be extended by no more than 8 additional days, but the seller must serve notice claiming the extension no later than the next business day after the final day of the original period.

The notice does not have to specify the precise number of extra days that will ultimately be used.

Shipment Extension Reduces the Contract Price

The buyers receive a contractual allowance based on the number of days by which shipment exceeds the original period.

For 1 to 4 additional days, the allowance is 0.50% of the gross contract price. For 5 or 6 additional days, it is 1%. For 7 or 8 additional days, it is 1.50%.

If the sellers claim the extension but fail to ship within the additional eight-day period, the contract is treated as having called for shipment during the original period plus eight days at the contract price reduced by 1.50%. Any default settlement is then calculated on that basis.

Where an allowance becomes payable under this clause, the reduced price becomes the effective contract price for the calculation of other contractual differences.

Appropriation Identifies the Shipment to the Contract

Clause 11 regulates appropriation of the shipment.

The notice of appropriation must identify the ship by name, state the presumed weight shipped, and give the date or presumed date of the Bill of Lading (B/L).

The shipper must serve the notice directly on its buyer or on the selling agent or brokers named in the contract within 10 consecutive days from the Bill of Lading (B/L) date. The Non-Business Days Clause does not extend this particular ten-day period.

String Sellers Must Pass Appropriation Notices Promptly

Where the goods have been resold through a contractual chain, subsequent sellers must pass the appropriation notice to their buyers within the period prescribed by the form.

If a subsequent seller receives the notice on the last day of the original ten-day period or later, the notice remains timely if passed on the same calendar day where it was received no later than 1600 hours on a business day.

If it is received after 1600 hours or on a non-business day, the subsequent notice remains timely if served by 1600 hours on the next business day.

Notice Through a Selling Agent or Broker Is Contractually Effective

A notice of appropriation served on the selling agent or brokers named in the contract is treated as notice served on the buyer.

The selling agent or broker receiving the notice must then pass the corresponding notice onward in accordance with the contractual timing rules.

The Bill of Lading (B/L) date stated in the notice is informational and does not bind the parties if incorrect. For calculation of the appropriation deadline, the actual Bill of Lading (B/L) date prevails.

Transmission Errors Can Be Corrected in Good Faith

The form allows correction of errors arising in transmission where the sender is not responsible for the error and also protects repetition in good faith of a previous transmission error.

If the ship arrives before the buyers receive the required appropriation and extra expenses arise as a result, those expenses are for the sellers’ account.

Once a valid appropriation has been received, it cannot be withdrawn without the buyers’ consent.

If a single ship tenders less than 95 tonnes, the buyers can recover proved extra costs for sampling, analysis, and lighterage incurred at the discharge port.

Payment Is Based on Documentary Exchange

Clause 12 creates the central documentary-payment machinery.

The parties insert the agreed percentage of the invoice amount and the currency in which cash payment is to be made. Depending on the selected alternative, payment is made in exchange for and upon presentation of shipping documents, or the buyers may elect to pay for the shipping documents on or before arrival of the ship at destination.

The sellers may also be given the contractual option to require buyers to take up and pay for the documents after the agreed number of consecutive days from the Bill of Lading (B/L) date.

The Shipping Document Package Is Defined Contractually

The standard documentary set begins with the invoice and a full set of onboard Bills of Lading (B/Ls), Ship’s Delivery Orders, or other Delivery Orders in negotiable and transferable form.

If the buyers require other Delivery Orders, those documents are to be countersigned by the shipowners, their agents, or a recognised bank.

For CIF and CIFFO sales, the documentary package also includes the appropriate insurance policies, insurance certificates, or letters of insurance in the contract currency. A letter of insurance must be certified by a recognised bank if the buyers require it.

Other documents specifically required by the contract must also be included.

The buyers agree to accept documents incorporating the Chamber of Shipping War Deviation Clause or another recognised official War Risk Clause.

Late Shipping Documents Can Be Replaced Temporarily by an LOI

One of the most commercially significant provisions appears in clause 12(c).

If the shipping documents are unavailable when the buyers call for them, or if they are unavailable when the ship reaches destination, the sellers must provide other documents or a Letter of Indemnity (LOI) enabling the buyers to obtain delivery of the goods.

The buyers then make payment in exchange for that substitute documentation or Letter of Indemnity (LOI).

Importantly, payment against the substitute does not prejudice the buyers’ contractual rights once the original shipping documents become available.

Buyers Can Arrange Their Own Indemnity if Sellers Fail to Do So

If the sellers fail to provide the shipping documents, alternative documents, or a Letter of Indemnity (LOI) enabling delivery, clause 12(d) permits the buyers to take delivery under an indemnity provided by themselves.

The buyers then pay for the other contractual documents when they are eventually presented.

Reasonable extra expenses caused by the sellers’ failure, including the cost of the indemnity and additional charges, are for the sellers’ account.

Again, the buyer’s payment does not prejudice its rights under the contract when the original shipping documents are eventually produced.

Incomplete Documentary Sets Do Not Necessarily Stop Payment

Where the shipping documents contain an incomplete set of Bills of Lading (B/Ls), or another required shipping document is missing, payment is still to be made if delivery of the missing document is guaranteed.

If the buyer requires it, that guarantee must be countersigned by a recognised bank.

The form therefore favours continued contractual performance where documentary defects can be secured adequately rather than treating every missing document as an immediate basis for refusing payment.

Collection Costs and Clerical Errors Are Allocated Expressly

Ordinary collection costs are for the sellers’ account. If the buyers insist that presentation occur only through a bank of their own choosing, the additional collection cost created by that choice is for the buyers.

An obvious clerical error in the documents does not entitle the buyers to reject the documents or delay payment. The sellers remain responsible for any loss or expense caused by the error and must provide an approved guarantee if requested.

Delayed Payments Can Produce Interest and Arbitration

Amounts payable under the contract are to be settled without delay.

If an amount remains unsettled, either party may notify the other that a dispute has arisen and state its intention to refer the matter to arbitration under the contract.

Where payment has been unreasonably delayed, interest appropriate to the contract currency can be charged. If the parties cannot agree the interest charge, that disagreement itself is treated as a dispute for arbitration.

Export and Import Charges Are Divided by Country

Clause 13 allocates government charges according to whether they arise in the origin or destination country.

Export duties, taxes, levies, and similar charges in the country of origin, whether present or future, are for the sellers’ account.

Import duties, taxes, levies, and similar charges in the destination country are for the buyers’ account.

Discharge Obligations Depend on the Selected Price Basis

Clause 14 distinguishes between CIF/C&F sales and CIFFO/C&FFO sales.

For CIF and C&F terms, discharge is to proceed as fast as the ship can deliver in accordance with the custom of the port. If the shipment is made under liner Bills of Lading (B/Ls), discharge instead follows the terms of those Bills of Lading (B/Ls).

Under these CIF/C&F provisions, the cost of discharge from the hold to the ship’s rail is for the sellers, while the cost from the ship’s rail overboard is for the buyers.

For CIFFO and C&FFO terms, the cost of discharge is for the buyers’ account.

Free-Out Discharge Uses a Laytime and Demurrage Mechanism

Where the free-out structure applies, the parties insert the contractual discharge rate in tonnes per Weather Working Day, Saturdays, Sundays, Holidays Excepted, Unless Used, with actual time used counting where the exception is worked.

Notice of Readiness (NOR) is tendered during ordinary office hours on arrival on a WIPON, WIBON, WIFPON, and WCCON basis.

Laytime begins at 0800 hours on the next working day.

The demurrage and despatch rate follows the charterparty. If the carrying ship is employed under a time charter, the daily hire rate is used as the demurrage rate and despatch is calculated at half that amount.

Non-Compliant Discharge Documents Can Shift Extra Expense to Sellers

If the sellers tender documents that do not permit discharge in accordance with clause 14 or contain contrary provisions, the sellers are responsible for the extra expenses caused to the buyers.

Grab discharge is permitted unless expressly excluded when the contract is concluded.

If shipment is made by LASH barge, the last day of discharge is treated as the day when the final LASH barge is discharged at the destination port.

Weighing Is Governed by GAFTA Rules No. 123

Clause 15 incorporates GAFTA Weighing Rules No. 123.

Unless the parties agree otherwise, final settlement is based on gross delivered weights determined at the time and place of discharge, with the weighing expense for the buyers.

If the destination lies outside the port limits, the buyers must pay the additional expenses incurred by the sellers or their agents in arranging weighing.

No payment is made for an increase in weight caused by water or oil during the voyage.

The parties can instead agree that weight is final at the time and place of loading according to a certificate issued by a GAFTA-registered superintendent at the seller’s option and expense. Where that alternative is used, the Deficiency Clause does not apply.

Bill of Lading Weight Deficiencies Are Settled at Contract Price

Clause 16 provides that any deficiency against the Bill of Lading (B/L) weight is paid for by the sellers, while any excess above the Bill of Lading (B/L) weight is paid for by the buyers at the contract price, unless the Pro Rata Clause applies.

Sampling and Analysis Are Governed by GAFTA Rules No. 124

Clause 17 incorporates GAFTA Sampling Rules No. 124.

Unless the parties have agreed that quality is final at loading, samples are taken at discharge on or before removal of the goods from the ship or quay.

If quality is final at loading, the samples are taken at the time and place of loading.

The parties appoint superintendents from the GAFTA Register of Superintendents for supervision and sampling. Unless otherwise agreed, analysts are selected from the GAFTA Register of Analysts.

CIF and CIFFO Sellers Must Arrange Insurance

Clause 18.1 applies to CIF and CIFFO contracts.

The sellers must provide insurance on terms no less favourable than those specified by the contract and GAFTA Insurance Terms No. 72.

The required protection includes the specified cargo cover, war cover, and strikes, riots, and civil commotions cover.

Insurance Must Be Placed with Qualifying Underwriters

The insurance is to be effected with first-class underwriters or companies domiciled or carrying on business in the United Kingdom, or insurers that accept a British domicile for legal proceedings and provide a London address for service.

The sellers are not responsible for the solvency of the qualifying underwriters merely because they arranged cover in accordance with the contractual requirement.

The Insured Amount Must Exceed the Invoice Value

The insured amount must be no less than 2% above the invoice amount.

Where freight is payable on shipment or is payable in any event whether ship or cargo is lost or not, freight is included in the insured basis together with any War Risk premium payable by the buyers.

The purpose is to ensure that the insured value is not limited to the bare invoice amount where the contractual exposure extends beyond it.

Freight Contingency Cover Applies Where Freight Is Payable on Delivery

If freight is payable only on arrival or on right and true delivery and is not included in the principal cargo insurance, the sellers must arrange corresponding freight contingency insurance.

The cover attaches as the freight becomes payable and is to protect the amount of freight plus 2% until termination of the relevant insured risk.

The policy structure is intended to place the buyers in the equivalent position to having the CIF (Cost, Insurance, and Freight) value plus 2% insured from shipment.

Insurance Documents Must Match the Contractual Value

The sellers must provide the required policies, insurance certificates, or letters of insurance for the original and any increased value stipulated by the contract.

If a certificate is supplied, it must be exchangeable for a policy when required and should state that exchangeability on its face.

If buyers require it, letters of insurance must be guaranteed by a recognised bank or another guarantor acceptable to the buyers.

Total Loss Is Settled on the Contractual Insurance Basis

In the event of a total or constructive total loss, or another event making the full insured amount payable, the amount exceeding 2% above the invoice value is for the sellers’ account.

The party holding the insurance policy collects the proceeds and then settles with the other party on the basis required by the contract.

Insurance claims are payable in the contract currency.

War and Strike Risk Premiums Above 0.50% Are for Buyers

Any War and Strike Risks premium exceeding 0.50% is for the buyers’ account.

The insurance rate must not exceed the rate prevailing in London at the time of shipment or the ship’s sailing date, whichever basis the underwriters use.

The seller should claim the excess premium with the provisional invoice where possible and in any event within the contractual deadline linked to the ship’s arrival or agreement of the rate with underwriters.

A late claim can become void unless arbitrators consider the delay justified.

The seller’s obligation to provide War Risk Insurance is limited to the terms and conditions generally available in London at the time of shipment.

Buyers Arrange Insurance Under C&F and C&FFO Terms

Clause 18.2 transfers the insurance obligation to buyers where the contract is concluded on C&F or C&FFO terms.

If sellers require evidence before loading that suitable insurance has been arranged, buyers must provide it.

If buyers refuse or fail to provide evidence, sellers are entitled, but not obliged, to arrange insurance on the same contractual basis at the buyers’ expense.

The Prohibition Clause Cancels Performance Affected by Export Restrictions

Clause 19 deals with prohibition of export, blockade, hostilities, or governmental action in the country of origin or territory containing the named loading port that restricts export partially or completely.

The restriction is treated as applying to the contract to the extent that it prevents performance. The affected contract or unfulfilled portion is cancelled accordingly.

The sellers must advise the buyers without delay and provide proof supporting the cancellation if requested.

Force Majeure Protects Sellers Against Defined Shipment Delays

Clause 20 excuses sellers from responsibility for shipment delay caused by specified events including Act of God, strike, lockout, riot, civil commotion, combination of workmen, machinery breakdown, fire, unforeseeable and unavoidable impediment to navigation, or another cause falling within force majeure.

If shipment is likely to be delayed for one of these reasons, the shipper must notify the buyers within 7 consecutive days of the occurrence or not less than 21 consecutive days before commencement of the contract period, whichever deadline is later.

The notice must state the reason or reasons for the anticipated delay.

A Further Notice Is Required if the Shipment Period Must Be Extended

If the seller needs additional shipment time after giving the initial force majeure notice, the shipper must serve a further notice no later than the final day of the contractual shipment period.

That further notice must identify the loading port or ports from which the goods were intended to be shipped.

Any shipment made after the original contractual period is then limited to the nominated port or ports.

Buyers Can Cancel After 30 Days of Force Majeure Delay

If shipment is delayed for more than 30 consecutive days, the buyers may cancel the delayed portion.

The cancellation option must be exercised by notice received no later than the first business day after the additional thirty-day period.

If buyers do not cancel, the delayed portion is automatically extended for a further 30 consecutive days.

If shipment remains prevented during that second thirty-day extension, the contract becomes void for the affected performance.

Provided sellers supply satisfactory evidence where required, buyers have no claim for delay or non-shipment falling within the clause.

Contractual Notices Must Be Sent Rapidly and Proved if Disputed

Clause 21 requires notices under the contract to be communicated rapidly in legible form.

The recognised methods in the form include telex, hand-delivered letter, telefax, email, or another electronic means.

If receipt of a notice is disputed, the burden lies on the sender to prove to the satisfaction of the arbitrators or board of appeal that transmission to the addressee actually occurred.

In resale or repurchase chains, notices must be passed without delay between successive sellers and buyers.

A notice received after 1600 hours on a business day is treated as received on the following business day.

Notice given to the brokers or agent is treated as notice under the contract.

Non-Business Days Extend Many Contractual Deadlines

Clause 22 treats Saturdays, Sundays, officially recognised or legal holidays in the relevant countries, and days declared by GAFTA as non-business days for specified purposes as non-business days.

If a contractual deadline for an act or notice expires on a non-business day, it is extended to the first business day thereafter.

The shipment period itself is expressly excluded from this automatic extension mechanism.

The Pro Rata Clause Deals with Larger and Commingled Quantities

Clause 23 applies where the contractual quantity forms part of a larger shipment of the same or different shipment period, includes bags of the same mark or similar quality, is carried in bags or bulk, or is destined for more than one port.

The form does not require physical separation or distinction of each contractual portion merely because the larger shipment serves several receivers.

Loose, Damaged Goods and Sweepings Are Shared Among Receivers

Loose collected cargo, damaged goods, and sweepings are apportioned pro rata in kind among the relevant receivers at the contractual discharge port.

If physical apportionment is impracticable or a receiver obtains more or less than its appropriate share, the receivers settle among themselves in cash using the applicable market price and each bears its proportion of depreciation in market value.

The pro rata statement is established by the sellers or their representatives together with the receivers or their representatives.

Pro Rata Adjustments Do Not Replace Final Seller-Buyer Invoicing

The allocation among receivers does not determine the final invoices between buyers and sellers.

For invoice purposes, the total loose collected, damaged goods and sweepings are treated as delivered to receivers that did not receive their full invoiced quantity.

Excesses and deficiencies between invoiced and delivered quantities are settled through final invoices at the relevant market price.

If one receiver has an excess while another has a deficiency, the receivers settle the difference between themselves at market price, with any remaining balance then reflected in invoices with their immediate sellers.

The Pro Rata Clause Creates Mutual Obligations Across the Trading Chain

Shippers, sellers, and buyers participating in the larger quantity under contracts containing the clause are treated as having entered mutual agreements to operate the pro rata mechanism.

Disputes concerning execution of the clause are submitted to arbitration under the contract.

All sellers and buyers must provide reasonable assistance, and sellers remain responsible for ensuring settlement by the relevant buyers within a reasonable time.

The market price used by the clause is the market price on the last day of discharge of the ship at the destination port, determined by agreement or arbitration.

Quality Allowances Use Actual Weight Under the Pro Rata Mechanism

If the Pro Rata Clause is activated, allowances relating to condition, quality, or another contractual guarantee are calculated on the actual weight received by buyers rather than the pro rata notional weight.

If a GAFTA-published method of apportionment applicable at the discharge port conflicts with the printed sub-clauses, the GAFTA method takes precedence where applicable.

Where goods become commingled and more than one shipper is involved, the shippers settle among themselves according to their Bill of Lading (B/L) quantities after the receiver-level adjustment has been completed.

If several discharge ports are involved, the settlement uses the average of the market prices on the last day of discharge at the respective ports.

The Default Clause Provides a Market-Based Damages Mechanism

Clause 24 applies where either party fails to fulfil the contract.

The innocent party can, after giving notice, sell or purchase against the defaulter. The resulting sale or purchase establishes the default price.

If the parties dispute that price, or if the innocent party does not exercise the right to sell or purchase against the defaulter and damages cannot be agreed, the amount is determined by arbitration.

Default Damages Are Based Primarily on Market Difference

Damages are based on, but are not strictly limited to, the difference between the contract price and either the default price established through the replacement transaction or the actual or estimated value of the goods on the default date.

Loss of profit on sub-contracts is not normally included unless the arbitrators or board of appeal consider the special circumstances sufficient to justify such recovery in their sole and absolute discretion.

Damages are calculated on the appropriated quantity where one exists. If no quantity has been appropriated, the mean contract quantity is used and contractual options are treated as exercised in favour of that mean quantity.

Failure to Appropriate Can Itself Establish the Default Date

Sellers may declare default after expiry of the contract period, with the default date becoming the first business day after notice to the buyers.

If default has not already been declared and no appropriation notice is served by the tenth consecutive day after the final contractual appropriation date, the seller is deemed in default and the first business day after that point becomes the default date.

The Circle Clause Replaces Default Where the Same Goods Return Through the Chain

Clause 25 applies where sellers repurchase from their buyers or a subsequent buyer the same goods or part of the same goods.

A contractual circle is then treated as existing for the repurchased quantity, and the ordinary Default Clause does not apply to that portion.

For this purpose, the same goods must satisfy the form’s requirements concerning description, country of origin, quality, applicable analysis warranty, destination, and shipment period. Different contract currencies do not prevent a circle from existing.

Circle Settlements Can Proceed Without Physical Documentary Performance

Subject to the Prohibition Clause, if the goods are not appropriated, or if they are appropriated but documents are not presented, the parties in the circle settle invoices on the mean contract quantity using the mechanism specified by the form.

Where the circle is established, non-presentation of documents between buyers and sellers within the circle is not itself treated as a breach.

All parties must assist in identifying the circle, and once established in accordance with the clause it is binding.

Insolvency Changes the Basis of Circle Settlement

If a party within the circle commits an act falling within the Insolvency Clause before the payment due date, the circle settlement is recalculated using the contractual closing-out price rather than the ordinary lowest invoice amount.

Payments between respective buyers and sellers then reflect the difference between the closing-out price and each contract price.

The Insolvency Clause Requires Rapid Notice

Clause 26 lists a broad range of insolvency events, including suspension of payments, notification to creditors of inability to meet debts, creditor meetings, voluntary arrangements, administration, winding up, appointment of a receiver or manager, liquidation steps outside reconstruction or amalgamation, certain interim orders, and bankruptcy petitions.

The party committing an Act of Insolvency must notify the contractual counterparty immediately.

If proof is provided that the notice was served within 2 business days of the event, the contract is closed out at the market price prevailing on the business day following service of the notice.

Failure to Give Insolvency Notice Gives the Other Party a Choice of Closing-Out Date

If the required notice is not served, the other party can choose between the market price on the first business day after it learned of the insolvency event and the market price on the first business day after the event itself occurred.

The innocent party also retains the option of establishing the settlement price through an actual repurchase or resale. The difference between the contract price and the replacement price then becomes the amount payable or receivable.

English Law and English Domicile Govern the Contract

Clause 27 provides that the contract is deemed to have been made and performed in England and is governed by English law notwithstanding contrary provisions elsewhere.

Subject to the arbitration structure, the English courts have exclusive jurisdiction over applications for ancillary relief, the exercise of court powers relating to the arbitration, and disputes not assigned to GAFTA arbitrators or the board of appeal.

The clause also contains a contractual service mechanism based on the offices of The Grain and Feed Trade Association in England.

GAFTA Arbitration Is the Primary Dispute Resolution Mechanism

Clause 28 requires disputes arising out of or under the contract, including disputes concerning interpretation or execution, to be determined by arbitration under GAFTA Arbitration Rules No. 125 in the edition current at the contract date.

Those Rules are incorporated into and form part of the contract.

The parties are treated as having expressly agreed to the application of the Rules and as being fully aware of them.

An Arbitration Award Is a Condition Precedent to Substantive Court Proceedings

Neither party, nor a person claiming through it, may bring substantive legal proceedings against the other regarding a contractual dispute before the dispute has first been heard and determined by the appropriate GAFTA arbitrator or board of appeal.

Obtaining the arbitral award is expressly made a condition precedent to subsequent court proceedings concerning the merits.

The clause nevertheless preserves the right to seek security for a claim or counterclaim through legal proceedings in any jurisdiction. Those proceedings must remain limited to obtaining security, while the substantive dispute continues to be determined through GAFTA arbitration.

Several International Sales Regimes Are Expressly Excluded

Clause 29 excludes a number of external legal regimes from the contract.

The Uniform Law on Sales and Uniform Law on Formation given effect through the Uniform Laws on International Sales Act 1967 do not apply.

The United Nations Convention on Contracts for the International Sale of Goods 1980 is also excluded.

The United Nations Convention on Prescription (Limitation) in the International Sale of Goods 1974 and its 1980 amending Protocol are excluded as well.

Most importantly for interpretation of the pricing expressions used in the form, Incoterms are expressly excluded.

Third-Party Rights Are Also Restricted

Unless the contract expressly states otherwise, a person who is not a party to the contract has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce a contractual term.

This reinforces the bilateral nature of the standard sale relationship unless the parties deliberately extend enforcement rights to another person.

GAFTA Form No. 100 and the Role of Bills of Lading

Bills of Lading (B/Ls) perform several functions within the contract. Their dates are used as primary evidence of shipment, their actual date controls the appropriation deadline, and they form a central part of the shipping-document package required for payment.

The form also recognises that Bills of Lading (B/Ls) may not always be available when the ship reaches destination. Rather than allowing the entire sale mechanism to collapse, clause 12 creates a substitute route through alternative documents or a Letter of Indemnity (LOI).

This does not mean that the original transport documents become irrelevant. The buyers’ rights remain preserved when those documents eventually become available.

The LOI Mechanism Supports Delivery but Does Not Rewrite the Sale Contract

The Letter of Indemnity (LOI) provisions are designed to maintain commercial performance when the documentary chain is delayed.

The seller can provide an indemnity enabling the buyer to obtain the goods even though the usual shipping documents have not yet arrived. If the seller fails to do so, the buyer can arrange its own indemnity and charge the reasonable resulting costs back to the seller.

Payment against the Letter of Indemnity (LOI) is therefore a temporary documentary solution rather than a waiver of the buyer’s substantive contractual rights.

Discharge and Payment Are Closely Connected

The contract links documentary readiness with the physical arrival of the ship.

Where documents are delayed, the parties are expected to use the alternative machinery in clause 12 so that delivery can proceed. Where discharge costs or laytime consequences arise because the contractual documents contain inconsistent provisions, the sellers can be responsible for the additional expense.

The commercial objective is to prevent documentary problems from unnecessarily interrupting the movement of the cargo while maintaining a clear financial allocation of the costs created by those problems.

Insurance Allocation Changes Between CIF and C&F Structures

The contract draws a fundamental distinction between transactions in which the seller provides insurance and those in which the buyer does so.

For CIF and CIFFO contracts, the sellers arrange the specified cover and provide the relevant insurance documents.

For C&F and C&FFO contracts, the buyers arrange the insurance and may have to prove that suitable protection is in place before loading if the sellers ask for evidence.

This allocation operates under the GAFTA wording itself because Incoterms are excluded by clause 29.

Contract Performance Is Structured Around Notices and Time Limits

Form No. 100 contains numerous time-sensitive obligations.

The shipment-extension notice must be served promptly after the original period expires. Appropriation generally operates within ten consecutive days of the Bill of Lading (B/L) date. String notices are governed by 1600-hour deadlines. Force majeure notices use seven-day and twenty-one-day timing rules. Insolvency notice must be proved within two business days to secure the primary closing-out mechanism.

These provisions demonstrate why commodity contracts require disciplined notice procedures. A party can possess a strong substantive argument and still lose a contractual right if it fails to serve notice within the form’s prescribed timetable.

Market Price Is Used Repeatedly as a Contractual Settlement Tool

The form repeatedly uses market price to convert quantity differences, pro rata discrepancies, defaults, and insolvency events into financial settlements.

Where the parties cannot agree the relevant market value, arbitration provides the mechanism for fixing it.

This approach allows the contract to continue operating even where exact physical performance differs from the original quantity or where the transaction has to be closed out before completion.

GAFTA Contract Form No. 100: The Practical Commercial Structure

GAFTA Contract Form No. 100 creates a comprehensive framework for bulk feedingstuff sales by combining commodity-sale obligations with shipping, documentary, insurance, discharge, and dispute-resolution provisions.

The quantity clause accommodates normal shipment variation while protecting both sides through later market-price adjustment. The quality clause converts many analytical differences into graduated allowances while reserving rejection for defined serious defects. The shipment and appropriation provisions create strict timing rules around the Bill of Lading (B/L), while the payment clause establishes the documentary package required before funds are released.

The form also anticipates the commercial reality that the ship can arrive before the documents. Its Letter of Indemnity (LOI) mechanism allows buyers to obtain delivery without permanently surrendering their rights when the original shipping documents later become available.

Discharge responsibility changes according to whether the contract uses CIF/C&F or the corresponding free-out structure. Insurance likewise shifts between seller and buyer depending on the selected basis. The Prohibition and Force Majeure Clauses provide defined relief for external restrictions and shipment delays, while the Default, Circle, and Insolvency Clauses create market-based mechanisms for closing out or settling transactions that cannot proceed normally.

Finally, the legal structure is deliberately centred on English law and GAFTA arbitration. GAFTA Arbitration Rules No. 125 govern substantive disputes, while the English courts retain the supporting and ancillary role specified in the contract. Incoterms and several international sales conventions are expressly excluded, making the wording of Form No. 100 itself the principal contractual reference for the rights and obligations of sellers and buyers.