Forward Sale Contract for United Arab Emirates

Forward Sale Contract Template for United Arab Emirates

A Forward Sale Contract governed by UAE law is a legally binding agreement that establishes the terms and conditions for the future sale and delivery of specified goods or commodities. This document, compliant with UAE Civil and Commercial Laws, details the arrangement where a buyer agrees to purchase specific goods from a seller at a predetermined price, with delivery scheduled for a future date. The contract includes comprehensive provisions for payment terms, delivery conditions, quality specifications, and risk allocation, while ensuring compliance with UAE regulatory requirements and, where applicable, Sharia principles.

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What is a Forward Sale Contract?

A Forward Sale Contract is essential for businesses operating in the UAE that engage in transactions involving future delivery of goods or commodities. This document type is particularly relevant when parties wish to lock in prices and terms for future transactions, providing certainty and risk management benefits for both buyers and sellers. The contract must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and Federal Law No. 18 of 1993 (Commercial Transactions Law), and may also need to consider Sharia compliance depending on the parties involved. It typically includes detailed specifications of the goods, delivery schedules, payment terms, quality standards, and risk allocation mechanisms. Forward Sale Contracts are commonly used in various industries including manufacturing, commodities trading, and international trade, where future pricing and supply certainty are crucial for business operations.

What sections should be included in a Forward Sale Contract?

1. Parties: Identification of the seller and buyer with full legal names and addresses

2. Background: Context of the transaction and brief description of the parties' intentions

3. Definitions: Definitions of key terms used throughout the contract

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

5. Purchase Price and Payment Terms: Agreed price, payment schedule, and method of payment

6. Delivery Terms: Delivery schedule, location, and conditions for delivery

7. Quality Assurance: Quality standards, inspection rights, and acceptance procedures

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

9. Representations and Warranties: Statements of fact and assurances from both parties

10. Events of Default: Circumstances constituting default and consequences

11. Termination: Grounds for termination and procedures

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

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

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

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

1. Sharia Compliance: Required if the contract needs to comply with Islamic finance principles

2. Security Arrangements: Include if additional security or guarantees are required

3. Price Adjustment Mechanism: Include for long-term contracts or when price flexibility is needed

4. Storage and Warehousing: Required if goods need intermediate storage before final delivery

5. Export/Import Requirements: Include for international forward sales

6. Broker/Agent Provisions: Required if intermediaries are involved in the transaction

7. Hedging Arrangements: Include if price hedging mechanisms are part of the agreement

What schedules should be included in a Forward Sale Contract?

1. Schedule 1 - Specification of Goods: Detailed technical specifications of the goods/assets

2. Schedule 2 - Delivery Schedule: Detailed timeline and milestones for delivery

3. Schedule 3 - Payment Schedule: Detailed breakdown of payment installments and dates

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

5. Schedule 5 - Form of Quality Certificate: Template for quality certification

6. Schedule 6 - Form of Delivery Notice: Standard format for delivery notifications

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

8. Appendix B - Insurance Requirements: Detailed insurance specifications and requirements

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

Sales Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Commodities Trading

Agriculture

Oil and Gas

Construction Materials

Textile Industry

Food and Beverage

Mining

Wholesale Trade

Industrial Equipment

Chemical Industry

Electronics Manufacturing

Automotive Industry

Relevant Teams

Legal

Procurement

Finance

Risk Management

Commercial

Operations

Compliance

Treasury

Sales

Supply Chain

Business Development

Contract Administration

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Legal Counsel

Contract Manager

Chief Financial Officer

Risk Manager

Trading Manager

Operations Director

Business Development Manager

Compliance Officer

Finance Manager

Treasury Manager

Sales Director

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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