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An introduction to contracts for the sale and purchase of commodities

Contracts for the sale and purchase of commodities lie at the heart of international trade.

A single transaction for the sale of a particular commodity is likely to involve a number of other contracts or commercial transactions including but not limited to:

1. •

   a contract for the transportation of the commodity by sea and, perhaps, by road and/or rail

2. •

   a contract of insurance

3. •

   the execution of a bill or exchange or the opening of a letter of credit or other documentary credit

Many, but not all, disputes arising out of contracts for the sale of commodities and other related contracts will be determined in arbitration. As will be discussed below, many of the bodies that produce standard form contracts or other services for a particular trade or trades also provide arbitration services. For more information on commodities arbitration, see Practice Note: Commodities arbitration—trade associations and arbitration rules.

The focus of this Practice Note is on contracts for the sale of commodities