Forward Purchase Contract for United Arab Emirates

Forward Purchase Contract Template for United Arab Emirates

A Forward Purchase Contract governed by UAE law is a legally binding agreement that establishes the terms and conditions for the future purchase of specified goods, assets, or commodities at a predetermined price. This document, compliant with UAE Federal Law No. 5 of 1985 (Civil Code) and relevant commercial regulations, outlines delivery schedules, payment terms, quality specifications, and risk allocation between parties. It incorporates specific UAE legal requirements, including consideration of Sharia law principles where applicable, and typically includes provisions for dispute resolution under UAE jurisdiction.

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What is a Forward Purchase Contract?

The Forward Purchase Contract is a crucial commercial document used in the United Arab Emirates for transactions involving future delivery of goods or assets at predetermined prices. This contract type is particularly relevant in the UAE's dynamic trading environment, where businesses need to secure future supplies while managing price fluctuations. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code), Commercial Code, and where applicable, Sharia law principles. It typically includes detailed specifications of the goods, delivery schedules, payment mechanisms, and quality standards. Forward Purchase Contracts are especially valuable in industries with volatile pricing or long lead times, providing certainty for both buyers and sellers while allocating risks appropriately. The document structure accommodates various commercial arrangements while ensuring enforceability under UAE law.

What sections should be included in a Forward Purchase Contract?

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

2. Background: Context of the transaction and relationship between the parties

3. Definitions: Defined terms used throughout the agreement, including specific industry terminology

4. Subject Matter of Sale: Detailed description of the goods/assets to be purchased, including specifications and quantities

5. Purchase Price: Agreed purchase price, payment structure, and terms including any deposits or advance payments

6. Delivery Terms: Timing, location, and method of delivery, including passing of risk and title

7. Quality and Inspection: Quality standards, inspection procedures, and acceptance criteria

8. Warranties and Representations: Warranties regarding the goods, authority to contract, and other standard representations

9. Payment Terms: Detailed payment mechanisms, currency, and banking arrangements

10. Risk and Title: Transfer of risk and ownership provisions

11. Events of Default: Circumstances constituting default and consequences

12. Force Majeure: Events excusing performance and procedures for handling such events

13. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction for disputes

14. Notices: Communication procedures and contact details for formal notices

15. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

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

1. Sharia Compliance: Required if the contract needs to be Sharia-compliant, including relevant certifications and structure

2. Security Arrangements: Include if any security or guarantees are required for the purchase

3. Insurance: Required if specific insurance arrangements are needed for the goods during transit or storage

4. Confidentiality: Include if sensitive commercial information will be exchanged

5. Anti-corruption: Include for high-value contracts or when dealing with government entities

6. Import/Export Requirements: Required if the transaction involves international trade

7. Storage: Include if interim storage arrangements are needed

8. Third Party Rights: Include if any third parties have rights under the contract

9. Assignment: Include if transfer rights need to be specifically addressed

What schedules should be included in a Forward Purchase Contract?

1. Schedule 1 - Specification of Goods: Detailed technical specifications of the goods to be purchased

2. Schedule 2 - Pricing Schedule: Detailed breakdown of prices, including any variable components

3. Schedule 3 - Delivery Schedule: Detailed timeline for deliveries, including any phasing

4. Schedule 4 - Quality Standards: Specific quality requirements and testing procedures

5. Schedule 5 - Form of Notice: Standard forms for various notices under the contract

6. Schedule 6 - Contact Details: Key contact persons and their details for both parties

7. Appendix A - Required Documents: List of documents required for completion of the purchase

8. Appendix B - Compliance Certificates: Required compliance and regulatory certificates

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 | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Commodities Trading

Oil and Gas

Agriculture

Real Estate Development

Construction

Wholesale Trade

Retail

Industrial Equipment

Technology Hardware

Automotive

Energy

Mining

Textiles

Food and Beverage

Relevant Teams

Legal

Procurement

Finance

Commercial

Supply Chain

Operations

Risk Management

Compliance

Treasury

Trading

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Chief Financial Officer

Legal Counsel

Contract Manager

Trading Manager

Operations Director

Risk Manager

Business Development Manager

Category Manager

Sourcing Manager

Finance Manager

Compliance Officer

General Counsel

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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