Buyer template
Feed supply contract term sheet template
The commercial terms to agree in writing before legal drafting begins on an annual or multi-shipment feed ingredient supply contract.
Procurement directors and commercial managers negotiating term contracts with mills, traders and additive producers.
When to use this template
- Converting spot purchases into an annual or quarterly contract
- Locking volume ahead of a seasonal price run
- Aligning finance, QA and legal before the contract goes to drafting
1. Commercial core
| Field | What to state | Example |
|---|---|---|
| Contract volume | State total tonnage plus a per-shipment range and tolerance. | 6,000 MT ± 10% at buyer's option |
| Delivery schedule | Monthly or quarterly call-offs with notice periods for each. | 500 MT/month, 21 days' notice |
| Pricing mechanism | Fixed, index-linked or formula — name the index and publication. | CIF price = index avg ± differential |
| Price review | Trigger, frequency and the cap on any single adjustment. | Quarterly, max ±7% per review |
| Currency & FX | Contract currency and who carries devaluation risk. | USD, buyer bears local FX |
| Incoterms 2020 | Always state the named place, not just the three letters. | CIF Lagos, Incoterms 2020 |
| Payment terms | Instrument, tenor and the documents that trigger payment. | Irrevocable LC at sight |
2. Quality & acceptance
- Specification annexed to the contract, with each parameter's method and limit
- Quality tolerances and the price adjustment scale for off-spec-but-usable lots
- Rejection threshold: the parameter values at which the buyer may reject outright
- Nominated independent surveyor at load and discharge, and who pays for each
- Weight and quality certificates: final at load port, final at discharge, or split
- Claim window in days from discharge, and the required supporting evidence
3. Risk & performance
| Field | What to state | Example |
|---|---|---|
| Performance security | Bank guarantee or performance bond as a percentage of contract value. | 2% performance bond |
| Late delivery | Liquidated damages per day with an overall cap. | 0.5%/week, capped at 5% |
| Force majeure | Define events, notice period, and the termination right after prolonged FM. | Notice 5 days, terminate after 60 |
| Export/import restrictions | Who bears a new export ban or import licence refusal. | Allocated to seller |
| Title & risk transfer | Align explicitly with the chosen Incoterm. | On ship's rail per CIF |
| Insurance | Cover level and named beneficiary for marine cargo. | 110% CIF value, buyer named |
4. Governance clauses
- Governing law and arbitration forum (GAFTA and FOSFA rules are standard for feed and oilseed trades)
- Assignment and subcontracting rights — especially if you are buying via a trader
- Confidentiality on pricing and formulation data
- Anti-bribery, sanctions and trade-compliance representations
- Termination for convenience, with notice period and wind-down of open call-offs
- Entire-agreement clause naming every annex: specification, schedule, price formula
Put this template to work
Send your completed template with a structured RFQ and we route it to pre-qualified feed ingredient suppliers — free, no obligation.
Request contract-volume quotesFrequently asked questions
- What should a feed supply contract term sheet cover?
- Volume and tolerance, delivery schedule, pricing mechanism and review triggers, currency, Incoterms with named place, payment instrument, the quality specification with tolerances and rejection thresholds, performance security, force majeure, and the governing law and arbitration forum.
- Should a feed contract be fixed price or index-linked?
- Fixed price protects budget certainty and suits short horizons or volatile currencies; index-linked pricing suits annual contracts on liquid commodities because suppliers price less risk premium into the differential. Many buyers split the volume between both.
- Which arbitration rules apply to feed ingredient contracts?
- GAFTA rules are the norm for grains and feedstuffs and FOSFA for oils, oilseeds and meals. Name the rules, seat and language in the term sheet — leaving it to the drafting stage is where most disputes about disputes begin.
- What quality tolerance is reasonable in a feed contract?
- Set a tolerance band with a pro-rata price adjustment for parameters like protein, moisture and fibre, and a hard rejection threshold for safety parameters such as aflatoxin, salmonella and heavy metals, where no discount should apply.