Forward Purchase Contract for the United Kingdom

Forward Purchase Contract Template for England and Wales

A Forward Purchase Contract is a legally binding agreement governed by English and Welsh law that establishes the terms for the purchase of specific assets, goods, or commodities at a predetermined price, with delivery and payment occurring at a future date. This document outlines the obligations of both parties, including pricing mechanisms, delivery terms, quality specifications, and risk allocation. It incorporates relevant provisions from the Sale of Goods Act 1979 and other applicable UK legislation, providing certainty and protection for both buyer and seller in forward-looking transactions.

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What is a Forward Purchase Contract?

Forward Purchase Contracts are essential instruments in commercial transactions where parties wish to secure future supply and price certainty. This contract type, governed by English and Welsh law, is commonly used in commodities trading, manufacturing, and real estate sectors. The Forward Purchase Contract typically includes detailed provisions on pricing, delivery schedules, quality requirements, and risk allocation. It provides protection against market volatility while ensuring supply chain security. The document incorporates relevant UK legislation, including the Sale of Goods Act 1979 and financial services regulations where applicable.

What sections should be included in a Forward Purchase Contract?

1. Parties: Identification and details of contracting parties

2. Background: Context and purpose of the forward purchase arrangement

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase Obligations: Core terms of the forward purchase including price, quantity, and delivery

5. Payment Terms: Payment schedule, method, and currency

6. Delivery Terms: Timing, location, and method of delivery

7. Representations and Warranties: Standard assurances from both parties

8. Term and Termination: Duration and circumstances for ending the agreement

9. Governing Law and Jurisdiction: Applicable law and courts

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

1. Quality Specifications: Detailed product specifications when purchasing specific goods with quality requirements

2. Force Majeure: Provisions for unforeseen circumstances, typically used when dealing with physical goods or long-term contracts

3. Price Adjustment Mechanism: Formula for price adjustments, used for long-term contracts or volatile markets

4. Security Arrangements: Collateral or guarantee requirements when credit risk is a concern

What schedules should be included in a Forward Purchase Contract?

1. Product Specification Schedule: Detailed technical specifications of goods

2. Pricing Schedule: Detailed pricing information and calculations

3. Delivery Schedule: Detailed delivery timelines and locations

4. Form of Quality Certificate: Template for quality certification

5. Security Documentation: Forms of security or guarantees if required

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

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Industries

Sale of Goods Act 1979: Primary legislation governing sale of goods contracts, defining rights and obligations of buyers and sellers, including implied terms about quality and fitness for purpose

Law of Property (Miscellaneous Provisions) Act 1989: Fundamental contract law legislation dealing with formalities for creation of contracts relating to land and property

Unfair Contract Terms Act 1977: Regulates unfair terms in contracts, particularly exclusion and limitation clauses

Consumer Rights Act 2015: Relevant when one party is a consumer, providing additional protections and rights for consumer contracts

Misrepresentation Act 1967: Governs statements made during contract negotiations and provides remedies for misrepresentation

Financial Services and Markets Act 2000: Regulatory framework for financial services and markets, particularly relevant if forward contract involves financial instruments

European Market Infrastructure Regulation (EMIR): Post-Brexit UK version governing derivatives reporting and clearing requirements

Limitation Act 1980: Sets statutory time limits for bringing legal claims related to the contract

Third Parties (Rights Against Insurers) Act 2010: Relevant legislation if insurance aspects are involved in the forward purchase contract

Electronic Communications Act 2000: Governs electronic execution and communications if the contract will be executed electronically

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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