Know Your Grain Contracts: Part 2 – Contract Formation

This blog is the second instalment of a three-part series examining grain contracts.

As described in our previous blog, grain contracts often fall into two categories: production contracts and delivery contracts. In this blog, we'll discuss some additional issues that parties in a grain contract should consider, including steps they can take to protect themselves at the early stages of entering into a contract.

Grain contracts operate the same as any other contract, and are governed by traditional principles of contract law. When there are big price fluctuations, parties on both sides of the contract may look to exploit contractual weaknesses in order to take advantage of the price change. Since no one can predict future market prices, it is in the best interest of both parties to ensure that their contracts are valid and binding on the other party. Dotting your I's and crossing your T's is critical.