A performance bond is an unconditional guarantee provided by a bank to pay a specified amount to the beneficiary upon the first demand. This guarantee protects the beneficiary’s interests in cases where the seller, supplier, or another party fails to meet their contractual obligations. In international trade and construction projects, a performance bond is a key instrument to mitigate the risks associated with non-fulfilment of obligations. A performance bond is often used in contracts for…
The purpose of this article is to provide a basic understanding of the term FOB (Free on Board), which is one of the key terms in international trade. We will also examine how FOB is applied and what responsibilities are placed on the parties to a contract. FOB remains one of the most popular and widely used delivery terms in maritime shipping. General Meaning of FOB FOB means that the seller is responsible for delivering…
In international trade of agricultural commodities, issues of calculating damages for non-delivered goods are of key importance. In this article, we will consider how damages are calculated under Gafta and FOSFA contracts, as well as under English law. General Principles of Calculating Damages under English Law Under English law, damages for breach of contract are calculated on the assumption that the breaching party acts in the least favourable manner for the claimant. This rule is…
This article aims to provide a basic understanding of CIF and CFR terms. It also discusses some of their variants – CIFFO and C&FFO. These terms are usually used with Incoterms. Incoterms, or International Commercial Terms, are a set of standardized rules published by the International Chamber of Commerce (ICC) to facilitate international trade. These rules outline the responsibilities, costs, and risks of the parties in international trade. When parties refer to Incoterms, they incorporate…
In contracts that incorporate FOSFA 54, references to FOSFA HH54 or simply HH54 might appear. What does this signify, and why is it necessary? Short answer HH54 is a standard clause extending the shipment period. It’s optional because FOSFA 54 doesn’t inherently include an extension clause. This clause is part of FOSFA’s Optional & Special Clauses, available for purchase here. Detailed answer FOSFA 54 is a standard CIF contract (Contract for vegetable and marine oil…
This article is about the FOSFA Small Claims Single Tier Rules of Arbitration. The Federation has three sets of rules in total: Rules of Arbitration and Appeal (standard rules incorporated into most FOSFA proforma contracts) Rules of Arbitration for Brokerage Commission and Interest Small Claims Single Tier Rules of Arbitration (“the Small Claims Rules”) The Small Claims Rules are not incorporated into FOSFA pro forma contracts. They only apply when the parties have envisaged them…
This article is about FOSFA arbitration under the Rules of Arbitration for Brokerage Commission and Interest (“Brokerage rules). You can read about the standard FOSFA arbitration rules here. The rules are designed for brokers in case of non-payment of commission. Usually, these are simple disputes that do not involve a lot of evidence, complex legal issues, and oral hearings. The primary purpose of the rules is to make the collection of brokerage commissions a simple,…
Based on my speech at the Trend & Hedge Club in Kyiv. Over the last few years, the Ukrainian media have been abuzz with scandals about default of traders. Those traders were seen as solid market players with excellent prospects for the future. In 2019 it was Agroinvest and Cardiff. In 2020 it was Spike Trade. Now it is time for Mimier. The stories are different, but they all follow the same script: Stage 1:…
