To contract profitably, growers will have to carefully estimate their anticipated production costs. Even with a contract, there are risks of non-performance or misinterpretation. These risks can be minimized by carefully reviewing the terms of the contract and the credibility of the buyer. Both buyer and seller need to understand all terms of the contract before signing the agreement. The following is a check list of things you should keep in mind when deciding on a contract.
Contracts are binding on both parties.
The bond ensures that some minimal financial standards have been met. Each should be named and identified as to their contract position. Understand exactly what the pricing terms you have chosen will mean. The proper decision on pricing choices depends on how the individual views risk. Risk neutral - the decision maker is indifferent between certain and uncertain prospects of the same amount of money.