A contract is usually defined as a written or oral agreement between two or more parties involving an enforceable commitment to do or refrain from doing something. Acrobat Reader required . It is the goal of this segment to describe the basic legal principles that are applied when analyzing grain contracts so that the likelihood of a legal dispute arising is greatly reduced. A brief discussion of the income tax aspects of hedging and speculation is also included. Cash forward grain contracts are subject to some aspects of commercial law.
Commercial laws are generally the same across all jurisdictions.
These uniform laws have developed as a result of the increased complexity of business transactions and the conduct of those transactions across state lines. Acrobat Reader required . Acrobat Reader required . A basis contract transfers the basis risk and opportunity from the seller to the buyer on the date of the contract. Basis contracts let a producer lock in a basis that he or she believes is more favorable than one that will exist later.