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Forward Sale Agreement for Australia

Forward Sale Agreement Template for Australia

A Forward Sale Agreement is a legally binding contract governed by Australian law that establishes the terms and conditions for the future sale and purchase of specific goods, assets, or commodities. This agreement outlines the purchase price, payment terms, delivery schedules, quality specifications, and risk allocation between parties. It incorporates relevant Australian regulatory requirements, including those under the Corporations Act 2001 (Cth) and applicable state-based legislation. The document provides comprehensive protection for both parties by clearly defining their obligations, rights, and remedies while ensuring compliance with Australian commercial and contract law principles.

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What is a Forward Sale Agreement?

The Forward Sale Agreement is a sophisticated commercial contract used in Australian business transactions when parties wish to agree on the future sale and purchase of specific goods, assets, or commodities. This document type is particularly valuable when dealing with products that require future delivery, price certainty, or complex delivery arrangements. It addresses key commercial and legal requirements under Australian law, including provisions for payment terms, delivery conditions, quality specifications, and risk allocation. The agreement is commonly used in sectors such as mining, agriculture, and manufacturing, where future production or delivery timing is crucial. It incorporates necessary protections and compliance measures relevant to Australian jurisdiction, including considerations under the Corporations Act 2001 (Cth) and state-based commercial legislation.

What sections should be included in a Forward Sale Agreement?

1. Parties: Identification of all parties to the agreement, including full legal names and addresses

2. Background: Context of the agreement, including the purpose and basic commercial intent of the parties

3. Definitions and Interpretation: Defined terms, interpretation rules, and hierarchy of documents

4. Sale and Purchase Obligation: Core agreement to sell and purchase, including description of goods/assets

5. Price and Payment Terms: Purchase price, payment schedule, payment method, and any adjustments

6. Delivery Terms: Delivery timing, location, method, and acceptance procedures

7. Title and Risk: Transfer of title, risk allocation, and insurance requirements

8. Conditions Precedent: Any conditions that must be satisfied before the agreement becomes fully effective

9. Representations and Warranties: Standard and specific warranties from each party

10. Default and Termination: Events of default, remedies, and termination rights

11. Force Majeure: Definition of force majeure events and consequences

12. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

13. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

What sections are optional to include in a Forward Sale Agreement?

1. Security Arrangements: Used when additional security or guarantees are required for the transaction

2. Quality Specifications: Detailed quality requirements, particularly relevant for commodity forward sales

3. Price Adjustment Mechanisms: Complex pricing formulas or adjustment procedures, if applicable

4. Storage and Handling: Required when specific storage or handling requirements exist before delivery

5. Multiple Delivery Points: When deliveries are to be made to different locations

6. Change of Control: Restrictions or requirements regarding ownership changes of either party

7. Intellectual Property: If the forward sale involves products with IP implications

8. Confidentiality: Detailed confidentiality provisions if sensitive information is involved

9. Environmental Compliance: Required for transactions involving environmental considerations or obligations

What schedules should be included in a Forward Sale Agreement?

1. Schedule 1 - Product Specifications: Detailed technical specifications of the goods/assets being sold

2. Schedule 2 - Pricing Mechanism: Detailed pricing calculations, formulas, and adjustments

3. Schedule 3 - Delivery Schedule: Detailed timeline of delivery dates and quantities

4. Schedule 4 - Quality Testing Procedures: Specific procedures for quality verification and acceptance

5. Schedule 5 - Form of Transfer Documents: Template documents required for transfer of title

6. Schedule 6 - Security Documents: Forms of any required security or guarantee documents

7. Schedule 7 - Key Contacts: List of authorized representatives and contact details

8. Appendix A - Site Access Procedures: If relevant, procedures for accessing delivery or storage locations

9. Appendix B - Compliance Requirements: Specific regulatory or compliance requirements applicable to the transaction

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Australia

Publisher

Genie AI

Sector

Cost

Free to use

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