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Forward Sale Contract for Philippines

Forward Sale Contract Template for Philippines

A Forward Sale Contract under Philippine law is a legally binding agreement where a seller commits to delivering specific goods to a buyer at a predetermined future date for a price agreed upon at the time of contract formation. This document, governed by Philippine commercial and civil law, outlines the terms and conditions of the forward sale, including detailed specifications of goods, delivery schedules, payment terms, and quality requirements. It incorporates relevant provisions from the Civil Code of the Philippines and the Code of Commerce, ensuring compliance with local legal requirements while providing a comprehensive framework for managing future delivery obligations and associated risks.

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What is a Forward Sale Contract?

The Forward Sale Contract is a specialized commercial agreement used in the Philippine business environment when parties wish to secure future delivery of goods at predetermined terms. This document is particularly valuable in industries with seasonal production cycles, volatile pricing, or long-term supply needs. It establishes legally binding obligations under Philippine law, incorporating provisions from both the Civil Code and Code of Commerce. The contract typically details specific goods, quantities, quality standards, delivery schedules, and payment terms, while also addressing risk allocation and potential market fluctuations. It's commonly used in agricultural, manufacturing, and commodity trading sectors, providing certainty for both buyers and sellers in future transactions while ensuring compliance with Philippine legal requirements for forward contracts.

What sections should be included in a Forward Sale Contract?

1. Parties: Identification and details of the seller and buyer, including complete legal names, addresses, and registration details if applicable

2. Background: Context of the agreement and brief description of the parties' intention to enter into a forward sale arrangement

3. Definitions: Definitions of key terms used throughout the contract, including specific trading and delivery terms

4. Subject Matter: Detailed description of the goods/products being sold, including specifications, quantity, and quality standards

5. Price and Payment Terms: Purchase price, payment schedule, method of payment, and any advance payments or deposits required

6. Delivery Terms: Specific details about delivery time, location, method, and conditions for delivery

7. Quality Assurance: Quality standards, inspection procedures, and acceptance criteria for the goods

8. Risk and Title: Transfer of risk and ownership provisions, including insurance requirements

9. Representations and Warranties: Statements and guarantees made by both parties regarding their capacity and the goods

10. Default and Remedies: Consequences of default and available remedies for both parties

11. Force Majeure: Provisions for unforeseen circumstances affecting contract performance

12. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes

13. Notices: Process and requirements for formal communications between parties

14. Execution: Signature blocks and execution requirements

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

1. Performance Security: Required when additional security for performance is needed, specifying type and amount of security

2. Price Adjustment Mechanism: Include when parties agree to potential price adjustments based on market conditions or other factors

3. Storage Provisions: Necessary when goods require storage before delivery, specifying conditions and responsibilities

4. Quality Certification: Include when specific quality certifications or third-party testing is required

5. Intellectual Property: Required when the goods involve intellectual property rights

6. Confidentiality: Include when sensitive information will be shared between parties

7. Insurance Requirements: Detailed insurance provisions when specific coverage is required beyond standard terms

8. Export/Import Requirements: Include for international transactions requiring specific trade documentation

What schedules should be included in a Forward Sale Contract?

1. Schedule A - Product Specifications: Detailed technical specifications of the goods, including quality parameters

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

3. Schedule C - Price Calculation: Formula or method for calculating the final price, including any adjustments

4. Schedule D - Quality Standards: Specific quality standards, testing methods, and acceptance criteria

5. Schedule E - Required Documents: List of documents required for delivery and acceptance

6. Appendix 1 - Form of Quality Certificate: Template for quality certification documentation

7. Appendix 2 - Payment Schedule: Detailed breakdown of payment installments and timing

8. Appendix 3 - Inspection Procedures: Detailed procedures for inspection and acceptance of goods

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Sale Agreement

Cost

Free to use
Relevant legal definitions































Clauses


































Relevant Industries

Agriculture and Farming

Manufacturing

Commodities Trading

Mining and Resources

Food and Beverage

Textile and Apparel

Construction Materials

Energy and Utilities

Chemical Industry

Electronics Manufacturing

Relevant Teams

Legal

Procurement

Finance

Commercial

Supply Chain

Risk Management

Operations

Compliance

Sales

Treasury

Trading

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Contract Manager

Legal Counsel

Chief Financial Officer

Trading Manager

Risk Manager

Operations Director

Purchasing Officer

Sales Manager

Business Development Manager

Compliance Officer

Finance Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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