· Develop diagnoses for clients receiving psychotherapy· Analyz.docx

· Develop diagnoses for clients receiving psychotherapy*
· Analyze legal and ethical implications of counseling clients
with psychiatric disorders*
Select a client whom you observed or counseled this week.
Then, address the following in your Practicum Journal:
· Describe the client (without violating HIPAA regulations) and
identify any pertinent history or medical information, including
prescribed medications.
· Using the Diagnostic and Statistical Manual of Mental Health
Disorders, 5th edition (DSM-5), explain and justify your
diagnosis for this client.
· Explain any legal and/or ethical implications related to
counseling this client.
· Support your approach with evidence-based literature.
PATIENT DATA:
· Data:
Met with pt to complete biopsychosocial assessment.
Pt presents as a 23-year-old male, DOC is cocaine. Pt unsure of
the amount that he was using. Pt reports smoking crack 3-4
times per week and marijuana 3-4 times per week. Pt denies any
seizures, DT's, blackouts, or OD's. Pt reports that he has been
extremely bothered by cravings to use in the past month. Pt was
at CBH in December 2018. Pt reports that 3 weeks ago he had 2
months clean. Pt reports that his cousin struggles with substance
use and mental health issues. Pt denies SI, HI, and SH.
Pt reports dangerous behavior, including buying drugs in
dangerous areas. Pt reports that he is unemployed and that it is
due to substance use. Pt reports that he has no financial income.
Pt plans to return to sober living after treatment. Pt does not
have any children. Pt reports that he will not be impacts by

religion/spirituality during recovery. Pt signed ROI for mom.
· Assessment:
AD1: Pt reports drowsiness, body aches, and difficulty sleeping.
Pt rates cravings to use as 3/10.
AD2: Pt denies any medical issues.
AD3: Pt reports feelings of depression and anxiety. Pt rates
depression as 7/10 and anxiety as 5/10. Pt reports a history of
anxiety, depression, and bipolar diagnoses but was unsure when
he was diagnosed. Pt reports being prescribed Lithium,
Strattera, and Prolixin. Pt denies SI, HI, and SH.
AD4: Pt presents in the precontemplation stage of change. Pt
reported "I guess so" when questioned about if he wants to stop
using or not. Pt reports that giving up using is difficult because
he just likes to get high.
AD5: Pt is unable to identify any triggers for him to use. Pt
reports that sleeping is the only thing that helps him stay sober.
Pt lacks insight into relapse prevention skills or any coping
skills to manage uncomfortable feeling.
AD6: Pt report that he was living at a sober living facility and
plans to return there after treatment. Pt has a history of AA/NA
attendance but nothing recent. Pt reports that he is unemployed.
Pt reports that he has a history of arrest but refused to
elaborate.
· Plan:
PT will follow up with patient advocate regarding pt legal
issues. PT will follow up with patient on 4/22/19 to discuss
goals for pts treatment plan.
© The Grain & Feed Trade Association
@Gaftaworld
Gafta GPD

Trade Foundation Course
23-26 April 2019
London
Day One
@Gaftaworld
Welcome and introduction
Jaine Chisholm Caunt
Director General
Gafta
@Gaftaworld
Housekeeping
• Course Materials: Available via Dropbox –
Please access via the link that was sent to you.
• Fire: There will be a fire alarm test on Friday
morning.
• Mobiles: Switch to silent mode, but please feel

free to use social media! @Gaftaworld
#TFC2019
• Networking details & programme are in delegate
packs
@Gaftaworld
Basic principles of
contracting
Jonathan Waters
LLB, LLM, MCIARB, CMC
Registered Mediator, Barrister
General Counsel
Gafta
@Gaftaworld
English Contract Law

@Gaftaworld
Why English Law? (1)
It is what you have
agreed to!
It reflects what the
trade wants
Gafta Domicile Clause
Legal effect of Domicile Clause?
DOMICILE This contract shall be deemed to have been made in
England and to be performed in England, notwithstanding any
contrary provision,
and this contract shall be construed and take effect in
accordance with the laws of England. Except for the purpose of
enforcing any award made in
pursuance of the Arbitration Clause of this contract, the Courts
of England shall have exclusive jurisdiction to determine any
application for
ancillary relief, (save for obtaining security only for the claim
or counter-claim),the exercise of the powers of the Court in
relation to the arbitration
proceedings and any dispute other than a dispute which shall
fall within the jurisdiction of arbitrators or board of appeal of
the Association
pursuant to the Arbitration Clause of this contract. For the
purpose of any legal proceedings each party shall be deemed to
be ordinarily resident or
carrying on business at the offices of The Grain and Feed Trade
Association, (Gafta), England, and any party residing or
carrying on business in
Scotland shall be held to have prorogated jurisdiction against
himself to the English Courts or if in Northern Ireland to have

submitted to the
jurisdiction and to be bound by the decision of the English
Courts. The service of proceedings upon any such party by
leaving the same at the
offices of The Grain and Feed Trade Association, together with
the posting of a copy of such proceedings to his address outside
England, shall be
deemed good service, any rule of law or equity to the contrary
notwithstanding.
Gafta 48: Clause 25
@Gaftaworld
• …“deemed to have been made in England”
• …“and to be performed in England”
• …“construed and take effect in accordance with the
laws of England”
Contract… Contract shall be…
• …“shall have exclusive jurisdiction”
English courts…
• No appeal to English courts on point of law.
• Impact on Gafta’s ability to arbitrate
• May cause enforcement issues e.g.: “Arbitration at Gafta in
England according to the law of
Ethiopia.” ($7.5m dispute)
• Ethiopian law – Ethiopia not a signatory to UN Convention on

enforcement of arbitration awards
Be aware of Gafta 125 (Arbitration Rules)
What if you include a jurisdiction that is not England?
@Gaftaworld
• Fraud/corruption on increase in international
arbitrations
• Safe place to arbitrate
• Infrastructure (courts for ancillary relief) and
professional firms
Fraud London
• Ancilliary relief (Gafta 48, 26 (c.)): obtaining
security
• Commercially savvy – sympathetic to arbitration
Security Judiciary
• Highly beneficial, settled case law
• Although English law, arbitration hearing can take
place anywhere if parties agree
• Brexit?

Precedent Global
@Gaftaworld
Contract Formation
@Gaftaworld
Why Gafta Contracts?
• 80% of world trade in grain: Gafta contracts
• ‘Tried and tested’
• Backed up by internationally renowned Gafta dispute
resolution service
• Reflect what the trade wants
• International Contract Committee (ICC)
• Flexible: Parties are free to amend (and most do!)
• English Law
@Gaftaworld

What is a Contract? (1)
• In English Law a verbal Commodity Contract is legally
binding
(Sale of Goods Act S4)
• Why is it preferable to have a written agreement?
A legally binding agreement – (whether written* or
spoken)
*written can include emails, texts & even WhatsApp
@Gaftaworld
6 elements required to establish a valid contract:
Offer
By one party to the other
Acceptance
Unconditional
Consideration
Commonly the price
Intention to create legal
relations
Presumed in commercial contracts

Capacity
Presumed in commercial contracts
Legality
Sanctions
All must be present! If one is missing – no contract
@Gaftaworld
Context
• Speed of market – parties often agree main terms but leave
others to be agreed later – lack of clarity?
• Also, complications can arise due to brokers, different
jurisdictions and using a language in which the parties may not
be fluent
@Gaftaworld
• A statement of willingness to contract on specified terms made
with the intention that, if accepted, there will be a binding
contract
• Must be sufficiently clear/ detailed
• Is not the same as an “invitation to treat” (which is an
invitation to

make an offer)
• Can be withdrawn any time up until acceptance
• Are tenders offers?
Offer
How is a contract made? (1)
@Gaftaworld
When does a contract become binding?
• A contract will not be concluded and legally binding until the
offer is accepted unconditionally
o When can an offer be withdrawn?
o Offers with time limits (e.g. price shall remain £ x for 7
days)?
o Acceptance must be unconditional agreement to the terms of
the offer without qualification (“meeting of the
minds”)
o Acceptance must be communicated
o Silence is generally not acceptance but conduct may be
• An attempt to introduce new terms is not an acceptance but a
counter-offer
o a counter-offer is a rejection of the offer, a party cannot later
accept the initial offer
o mere requests for information are not counter-offers

• The “battle of the forms” – the last shot approach
Acceptance…
“We agree to your offer of 5,000mt of Ukrainian Corn, but for
good orders sake send us a full confirmation note”
Is this Acceptance?
Or is it a counter offer?
@Gaftaworld
• Essential to formation of contract
• English law will not enforce a gratuitous promise (a promise
which is not supported
by consideration) – there must be a “bargain”
• In practical terms it is the price that a party pays in return for
goods
• No requirement for consideration to be of market value.
Courts are not concerned
with whether parties have made a good or a bad deal!
• Phoenix Consortium purchase of Rover Group from BMW for
£10
Consideration

@Gaftaworld
• What if the existence of a contract is disputed?
o Particularly relevant if contract is verbal or there have been
subsequent variations to a standard contract
• Past business dealings
o Custom/practice?
• Evidence to show there was a contract
o Emails?
Intention to create legal relations
• The legal ability to enter into a contract
• Compare with authority to contract
o Does the signatory have the authority to enter into the
contract
on behalf of the counterparty?
• Broker/ agents authority to contract?
• “XXX shall have the authority to negotiate and
conclude the contract.”
• Enforcement action: S504 Turkish Code of Obligations
XXX had to have “special authority”. Turkish courts did
not enforce award.

• Sanctions
• Prevention of Shipment
• Phytosanitary certificates
Capacity
Legality/vitiating factors
@Gaftaworld
Incorporation
• Inclusion of terms
o Gafta incorporated terms: insurance (Gafta 72), weighing
(Gafta 123), sampling (Gafta 124),
arbitration (Gafta 125): all form part of contract
o Notice of terms needs to be given
o Terms must be in a document intended to be contractual
o Reasonable steps must be taken to bring it to the attention of
the party
• Confirmation Notes (Proper reference to correct Gafta
Contract?)
Addendum
• In 1 Gafta Arbitration Hearing, there were 9 attachments to
the contract. All were disputed and none
were signed! Arbitrators had to decide whether the 9 documents

formed part of the contract
• May cause an issue on enforcement
@Gaftaworld
Basic contractual obligations
and contractual terms
Jonathan Waters
General Counsel
Gafta
@Gaftaworld
Having established there is a contract, what
is contained within it?
@Gaftaworld

Seller
• Provides goods
• Goods conform with contract
• Puts goods on board ship
Buyer
• Arranges shipping/insurance
• Gives proper notice to seller (e.g. vessel,
port)= pre condition of contract. Failure: seller
under no obligation to perform
Legal title and risk pass on delivery to ship
‘all inclusive price’
Seller
• Makes shipping arrangements
• Delivers goods
• Ships goods
• Arranges insurance
Buyer
• Nominates port
• Takes delivery – meets cost of unloading/
import licences/ customs duties
• Pays for goods on receipt of shipping documents
Risk passes on delivery – legal title passes later
FOB – Free on Board CIF – Cost Insurance Freight
Basic Contractual Obligations
(Summary)

@Gaftaworld
Contractual Terms (1)
• Contents of a contract are called terms
• A term is something which imposes a contractual duty
(obligation)
• The phrase covers conditions, warranties and innominate
(intermediate) terms
Important to distinguish as classification determines the
remedy in the event that a counter party defaults
@Gaftaworld
• Specifically agreed
• Oral or in writing
Express
• Not specifically agreed but put into in the contract by statute
(Sale of Goods Act 1979) or by the
courts/arbitrators
• Implied by Courts/arbitrators to make ‘commercial
sense’/reflect intention of parties/reflect custom
and practice

• The Moorcock (1889)
• Importance of statutory implied terms
Implied
Contractual Terms (2)
Main terms will be set out in the written contract
• Gafta standard contracts
o Parties free to vary (and often do)
@Gaftaworld
Sale of Goods Act 1979:
Statutory Implied Terms
• Of critical importance in context of defaults
• S12. Seller has the legal title to the goods
• S13. Goods must correspond to description
• S14. Goods must be of satisfactory quality. Test is objective.
What would a reasonable (business) buyer
regard as satisfactory having regard to price, description and
other relevant factors
• S14. Goods must be fit for intended purpose
• S15. Goods supplied in bulk most correspond with sample
• Act can be excluded (exclusion clause): Air Transworld
Limited v Bombardier (2012): Check the contract
carefully (particular Counterpartys standard form contract
which may have been incorporated)

@Gaftaworld
Terms
Conditions
• A major (or fundamental) term: goes
to the very heart of the contract
• Breach entitles innocent party to
repudiate
• Repudiate: terminate contract and sue
for damages
Warranties
• A minor (less important) term
• Breach entitles innocent party to
damages ONLY and the contract
continues
• Most terms in a contract are
warranties
Distinction is critical!
Termination for breach of condition is a breach of contract if
the condition is actually a warranty!

@Gaftaworld
Identifying a Condition or Warranty
• Important to identify, in the contract, which terms are
conditions and which are warranties
• Generally, in a business contract courts will give effect
to what the parties have agreed
• But not always…!
@Gaftaworld
What was the outcome?
The Parties:
• Schuler – a tool manufacturer
• Wickman – a tool sales company
Scenario:
• Wickman granted the sole right to sell Schuler tools
• Condition of contract – Wickman had to send a sales person to
each named company
once a week to solicit sales
• Wickman failed to make some visits
• Schuler terminated the contract
Schuler vs. Wickman 1974

@Gaftaworld
Schuler vs. Wickman 1974 – The Outcome
• HELD Schuler and Wickman had not intended the
word ‘condition’ to be used in a strict legal sense
• The outcome – termination – would be
unreasonable
• The term was a warranty and termination by
Schuler was a breach of contract
@Gaftaworld
Intermediate Terms
• Intermediate term is neither a condition or a warranty!
• Traditional Approach – causes inflexibility/unfairness
• Minor breach of condition gives rise to termination
• Major breach of warranty does not

@Gaftaworld
Hong King Fir Shipping vs. Kawasaki 1962
• New approach: Intermediate term
• Courts may be prepared to disregard the ‘label’ (i.e.
‘condition’
or ‘warranty’)
o Has the innocent party been substantially deprived of whole
benefit of
the contract by the breach?
• If innocent party substantially deprived – termination and
damages
@Gaftaworld
Which Approach?
• For courts to decide
• Courts generally take the view that if parties have specifically
negotiated a
term as a condition then this is what they intended and will
uphold this
• Statutory implied conditions will always be conditions (unless
excluded)
• Case law has established that certain terms will be conditions
(e.g. opening L/C,

timing, appropriations, nominations, delivery, provisions
relating to tender of documents, failure of FOB Buyer to
nominate and provide a vessel) and certain terms will be
warranties (failure to pay
demurrage/carrying charges)
• Always take legal advice before alleging a breach of condition
and
terminating contract – if you get it wrong you are in breach of
contract
@Gaftaworld
The Goods, Description Quality and Condition
An Overview
@Gaftaworld
Sale of Goods Act 1979 (Refresher)
• Implied terms
• What type of term – condition, warranty or intermediate?
• Why is it important to distinguish between these?
• Context: Gafta arbitration – many contractual disputes re
description and quality

@Gaftaworld
Description – (S13)
• Clause 1 – Gafta 49
• Goods must be sold as described (i.e. correspond with their
description) –
examples from Gafta arbitration cases
o “Brazilian Yellow Maize”
o “Ukrainian Third Grade Feed Corn”
o “Free from Insects”
o “Wheat” – is this clear enough?
o “White Flour” – flour was yellow on arrival but of
satisfactory quality: Is this a misdescription?
o “Organic” – what does this mean?
o “Grade A Banana Skin Pulp” – What if Grade B is delivered?
What are the consequences for a misdescription?
@Gaftaworld
Satisfactory Quality
Clause 5 – Gafta 49
• Quality includes: natural characteristics of
the commodity (size, shape, chemical
composition) and condition (burnt, wet,

mouldy, infested)
• Goods deemed to be of satisfactory
quality if they meet the standard that a
reasonable (business) person would
regard as satisfactory, taking into account
any description, the price and other
relevant circumstances
Circumstances include:
• Fitness for all the purposes for which goods of
the kind in question are commonly supplied
(human or animal consumption)
̶ Appearance and finish
̶ Safety
̶ Durability
̶ Price
• Important to define quality in contract
• Satisfactory quality on delivery to vessel for
reasonable time thereafter (unless contract
provides otherwise)
@Gaftaworld
Certificate Final (1)
Mechanism for dealing with issues such as description and
quality.
• Gafta 48 – Clause 5 “Certificate of inspection at the time of
loading shall be final as

to quality”
• Parties agree that a third party will make a determination.
Buyer has assurance that
goods have been supplied in accordance with contract. Seller
has protection against
buyer latter alleging goods were defective
• Certificate is generally final and binding
• Buyer has no right to challenge findings (fraud is an
exception) – clause is pro-Seller
• But Buyer may argue that wording of certificate allows a
challenge to be made
Precise wording is critical!
@Gaftaworld
Certificate Final (2)
• Certificates are only final in relation to the matters they are
intended to
cover (eg “quality”). They are not final in respect of any other
matters not
expressly required to be certified in the contract – final as to
“quality”
would not be final as to “description”
• In such cases the buyer is not precluded from bringing a claim
if the goods
did not match their description

• Bow Cedar case. ‘Weight and quality’ final at loading as per
certificate of
independent surveyors. Dispute arose regarding description.
Sellers
argued there could be no claim. Buyers argued that clause only
related to
‘weight and quality’ and a claim for misdescription could still
be made. The
courts agreed
@Gaftaworld
Excluding the Sale of Goods Act
• S55. Sales of Goods Act – Allows parties to exclude statutory
implied terms
• Exclusion Clause must be reasonable (Unfair Contracts Terms
Act 1977)
• Air Transworld Limited V Bombardier 2012
• Aircraft alleged to be in breach of Sale of Goods Act – did not
correspond with
description not of satisfactory quality and unfit for purpose
• Exclusion Clause – excluded liability under Sale of Goods Act
• “Buyer…waives and releases all other warranties, obligations,
representations
or liabilities express or implied…including but not limited
to…any implied
warranty or merchantability or of fitness for a particular
purpose…”

• Exclusion Clause Valid
@Gaftaworld
Refreshments
@Gaftaworld
Gafta Contracts: An
introduction
Jonathan Waters
General Counsel
Gafta
@Gaftaworld
Overview of Gafta 49: Some Key Terms (1)
(FOB: Delivery of Goods, Central and Eastern Europe)

• Sellers/ Buyer (make sure counterparty is correctly identified)
• Brokers
Clause 1 Goods – description is a condition (Sale of Goods Act
1979) (Statutory
Implied Terms)
o “Brazilian Yellow Maize”
o “Lithuanian Milling Wheat”
o “Free from Live Insects”
o “White Flour”
@Gaftaworld
Overview of Gafta 49 (2)
Clause 2 Quantity – note ‘tolerance level’ “5% more or less at
buyers option”. (25,000MT i.e.
10% tolerance. 22,500MT or 27,500MT)
• If more than 1 delivery, each delivery is treated as a separate
contract –
Clause 3 Price – Fixed or a price ref to Futures market
Clause 5 Quality – a condition (Sale of Goods Act 1979)
(Statutory Implied Terms) Need to
decide when Quality will be determined – e.g. at loading or at
discharge. Scale of allowances if
not met.
Clause 6 Period of Delivery
• FOB contract – buyers to give notice of name/ probable
readiness of vessel. Sellers to
have goods ready to be delivered within contract period of

delivery
• Buyers right to substitute vessel
• Note: reference to notice (refer to clause 14)
@Gaftaworld
Clause 7 Loading
• Name of port
• Sellers to declare port if range given
• Vessel to be clean and fit
• Load in “accordance with custom of port” (incorporation)
• Bill of Lading is proof of delivery
Clause 8 Extension of delivery
• Buyer can serve notice to extend period by “an additional
period of not more than 10
consecutive days”
• “Consecutive days” meaning?
• “Notice” – how is it served?
@Gaftaworld
Clause 9 Insurance

• Note risks to be included
• “First Class underwriters and/ or approved companies”
• Note: Some contracts incorporate Gafta Insurance Rules 72 –
incorporation 14.1(b)
insurer to be domiciled/ carrying on business in UK or who will
accept British domicile
as an address for service
• Insurance Act 2015
• Insured to fairly present risk
• Failure – insurers remedy must be proportionate – avoid
policy, require additional term,
charge higher premium
@Gaftaworld
Clause 10 Payment/ Interest
• Cash against documents – Buyer pays when Seller presents the
specified documents
• Letter of Credit: Failure to provide workable letter by date
specified = Breach of
Condition
Clause 12 Duties/ Taxes
Clause 13 Prevention of Delivery

• Force Majeure
• What is it?
• Note Ice Provision
@Gaftaworld
Clause 14 Notices
• Form: Critical
• Communicated “rapidly in legible form”
• Telex, telefax, email, letter (delivered by hand on date
of writing)
• Problem areas:
o Incorrect form
o Incorrect period (time)
o Non receipt (burden of proof on sender)
o Sent to correct individual (Glencore v Conqueror
Holdings 2017)
o Notice to brokers: deemed to be good notice
• Wording required:
o Is ‘Gafta extension’ sufficient? In one case a
‘notice’ (message) was sent making no reference
to the shipment period and did not contain the
word ‘extension’
• Wording must be clear to the recipient
o Not for recipient to ‘second guess’

• Counterparty need to know extension being claimed
• Failure to give notice – no extension and shipment
period will not be extended beyond expiry date.
Recipient can reject claim damages
Notices are Conditions!
@Gaftaworld
Clause 16 Weighing
• Rule 123 Incorporation (Gafta Weighing Rules)
Clause 17 Sampling
• Rule 124 Incorporation (Gafta Sampling Rules)
• Samples at time/ place loading
• Parties appoint superintendent from Gafta
• Register of Analysts
Clause 18 Default
• Critical
• Measure of damages for breach of contract
@Gaftaworld

Clause 19 Circle
Clause 20 Insolvency
• Notice of insolvency (inability to meet debts)
to be served
• Failure to serve, termination
• Practical considerations
Clause 21 Domicile
• Critical
• English Law/ English Courts to apply
Clause 22 Arbitration
• Critical
• “Any and all disputes” to Gafta Arbitration
• Make sure it is included
Clause 23 international conventions
• Incoterms excluded
Clause 24 Phytosanitary Certificate
• Assists Sellers where Buyers ‘Game Play’
Anything else? Optional clauses (Gafta 131) ? Sanctions?
@Gaftaworld
• Buyer and Seller have been trading with each other since 2013
• Buyer telephones Seller and tells Seller he wishes to buy
25,000 metric tonnes of soyabean meal at $476
per metric tonne
• Seller agrees. No other terms are discussed

• 3 days later, Seller sends a ‘contract confirmation’ by SMS
including a summary of the agreed trade ‘as per
sellers standard contract terms’
Scenario
Case Study
• Is there a contract?
• Does the fact that the trade was agreed over the telephone
have any legal or practical
consequences?
• What is meant by a ‘contract confirmation’?
• Does the wording ‘as per sellers standard contract terms’ have
any relevance?
• Is it relevant that the parties have been trading since 2013?
Questions
@Gaftaworld
Lunch
@Gaftaworld
Responsibility and risk

Martin Sage
ADM Trading
Gafta Qualified Arbitrator
@Gaftaworld
What do we mean by Risk and Responsibility?
• Potential negative consequence of an event
• Which party bears the risk i.e. the loss
• CIF/FOB: Risk passes “as from shipment”
• Not the same as title
• Title – ownership, not possession
@Gaftaworld
Categories of Risk
• Risk in the Goods (physical/ quality, etc.)
• Shipment Risks (loss, delay, damage)
• Documentary Risks (validity, duty to tender, duty to pay,
value,
scope, liabilities)
• Legal Risks (country/political)

@Gaftaworld
What is a Contract?
A promise or set of promises which the law will enforce.
Today, specifically FOB and CIF contracts, and where you buy
on FOB
terms and sell CIF
@Gaftaworld
FOB
What are the parties’ primary duties?
@Gaftaworld
FOB Buyer
To give effective shipping instructions:
• Nominate and present a suitable vessel at the port of loading
in sufficient time
• Provide required information (e.g. quantity to be loaded, ETA,

flag, demurrage rate, etc.)
• Give documentary instructions – type, number, content.
** Consequence of failure…?
@Gaftaworld
FOB Seller
• Deliver contract-compliant goods
(description/quality/quantity)
• Load goods on board the ship nominated by the Buyer
(when, where, how fast)
• Provide the required documents
(doc instr., letter of credit, export formalities, conforming docs)
** Consequence of failure..?
@Gaftaworld
CIF
What are the primary functions?

@Gaftaworld
FOB
• Who is responsible for insuring the goods on board?
• What is the risk?
• Who is responsible for paying the freight?
• What is the risk?
• If goods are damaged on board before payment and the Master
clauses the B/L, who is responsible?
@Gaftaworld
CIF
Seller will provide documents which prove he has:
• Shipped goods of the contractual description
• Appropriate goods to the Buyer
• Insured them for the intended voyage at the contract value
• Shipped under a reasonable ctr of carriage within the agreed
time
period and paid freight to the agreed destination.
OR procure documents from someone who has done so.
**What risks do you see ?

@Gaftaworld
Risk in the Goods
Conformity with the terms of the Contract
@Gaftaworld
Risk in the Goods
Conformity with the terms of the Contract:
• Description – what does SoGA say?
• Specification – what does the Contract say?
• Condition – what does the Contract say?
• Sampling and analysis – Certificate final?
• Sale of Goods Act: Satisfactory, fit for purpose
@Gaftaworld
Shipment Risks
• Time for performance – FOB and CIF
• Suitability of vessel
- Shipment and classification clause
- Reasonable contract of carriage

• Safe port/safe berth
• Safe stowage
• Laytime and detention
• Impediments to performance
@Gaftaworld
Shipment Risks
• Insurance
- Type of cover (All Risks, WA…HSSC, SRCC, G/A…)
- Value of cover - market value?
- Suitable insurers - jurisdiction
- Where claims are settled – service of process
* Cargo damage and recovery – Ctr/ B/L / Insurance..?
* Act as prudent uninsured – mitigate loss!
@Gaftaworld
Documentary Risks
• What documents are listed in the printed forms?
• Buyer to give documentary instructions
- Can Seller supply them? (Phyto regs)
- Can Buyer obtain additional documents if needed?

- Are Seller’s documents sufficient to obtain payment?
**Consequences of missing or defective documents?
@Gaftaworld
Documentary Risks
• The Bill of Lading
- Receipt for goods shipped
- Document of title
- Evidence of a contract of affreightment
**Are Mates Receipts acceptable?
@Gaftaworld
Documentary Risks
• Payment:
- CAD: Where? When? How? (Security of docs)
- Letter of Credit: Is it workable?
(timing/revocable/confirmed/variation of terms)
• Import:
- Can Receiver import the goods? (Political/Country risk)

** Consequence of non payment…?
@Gaftaworld
Legal & Political Risks
• Sale of Goods Act
• Conformity with domestic legislation (export/import)
• Sanctions/Prohibitions/Restrictions…
• Transfer of title
• Potential conflict with other important documents –e.g.
Charter
Party, Bill of Lading, Letters of Credit
• Jurisdiction and Arbitration Proceedings
@Gaftaworld
Execution Risks
Notices:
• Appropriation – form, content and timing
• Nomination – content, timing (preadvice), substitution
• Extension - timing
• Prevention – circumstances, content and timing
• Default – circumstances, timing
• Arbitration – type of claim, time limit, renewal, proceedings

@Gaftaworld
Market Risks
• Who is responsible for market risk?
• What happens if a Seller defaults?
• What happens if a Buyer defaults?
• What about loss of profit?
@Gaftaworld
Instruction for Supervision
Chris Ranschaert
SGS
ISSUING INSTRUCTIONS : Ensuring
clarity and best practice
London, 23/04/2019
Ing. Chris Ranschaert
SGS Group Management – Agricultural, Food & Life

73
RULES AND CODE OF CONDUCT FOR
SUPERINTENDENTS
• Intended for superintendents listed on the GAFTA Register
of Approved Superintendents.
• If Superintendents act contrary to the provision of these
Rules they may be subject to disciplinary action
• Primary business activities are in the profession of
inspection
• In accordance with the agreed contract terms
• “When a Superintendent issues reports and certificates…
they shall reflect the actual and true findings”
• Accreditation ISO 17020, certification ISO 9001 or GTAS
audited
74
SUPERINTENDENTS
forms.
Price negotiations possible. It puts you in a position of

strength.
goods will be shipped.
company acts as a deterrent to suppliers. It has a
psychological effect. It acts to prevent problems.
company counts.
settlement.
tation
to the product in importing countries.
75
SUPERINTENDENTS
loading or discharging “the eyes and ear
• All operations it carries out shall comply with the appropriate
rules and the contract terms
• According to GAFTA Sampling Rules 124
• Can be done during loading or during discharge

• Need for submitting samples for testing to a laboratory on the
Register of GAFTA approved Analysts
• LCI : load compartments to be empty, clean, without
unsuitable odors, free from residues and vermin
• 3 preceding cargoes carried as declared by master +
cleaning methodology.
76
SUPERINTENDENTS
• According to GAFTA weighing rules N° 123
– Method as per contract or as per customs of the port
– Establish the method of weighing + create & keep records
– Weighing operations at appropriate place and time
– Information needed
» Apparatus used
» Approval by the authorities
» Info concerning calibration & verification
• Usually issued by national authorities
• Alternatively by the superintendents on basis of testing

• Only to other superintendent on the GAFTA register
77
ACCEPTING INSTRUCTIONS FROM THE CLIENT
• It is the duty of the principal to give instructions in due time
and these
instructions must be clear and unambiguous, including
sufficient detail to
enable the superintendent to carry out and perform the
inspection in
accordance with the requirements of the contract and according
to the
expectations of the principal
• An instruction is a directional message describing the task that
is to be
performed.
• In due time
• “As usual”
78

• It is the superintendent’s function to act on his Clients /
Principals behalf, ensuring that the consignment is in sound
condition, sampled and weighed correctly, accurate reporting,
and if needed making reserves against the concerned parties
• The duty of a Superintendent is to look after the best interests
of the parties to a contract and to act with neutrality, honesty
and integrity at all times.
• To be the ears & eyes of the client
79
superintendent will acknowledge and confirm the order,
detailing the
scope of work
inspector and
for the lab
80
– buyer/seller/receiver and their
representatives

– any tolerances – (more or less / min or max)
– Including testing methods
l
81
Fumigation,…
tements you need to have on your certificate,
e.g. FFHC,
Free from, etc... Be aware that some of these statements require
analysis.
ice)
82
SOME ISSUES

• Free from : not in the sample
• “Substantially free” or “practically free” : Fit for purpose
• Free from dead insects….
Sound, Loyal and Merchantable :
Organoleptic/condition
• IFIA minimum testing requirments
• Animal origin : sanitary/veterinary certificate authorities
• Plant origin : see “fit for…”
isrepresentation or non-sense certificates
• E.g. fumigation certificates, certifying non fumigation
83
http://www.google.be/url?sa=i&rct=j&q=&esrc=s&frm=1&sour
ce=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://
www.zazzle.com/not_fit_for_human_consumption_tee-
235828857982213166&ei=WQ0uVYiNLc2tuQTXgYHICw&bvm
=bv.90790515,d.c2E&psig=AFQjCNF_LTRQbY4t2uWbG5zWw
0CTixJhGg&ust=1429167764294358
84
www.de-
jaeger.be/?attachment_id=155&ei=gQwuVafqLMijugSQ2IDwA

Q&bvm=bv.90790515,d.c2E&psig=AFQjCNGfw4YweFXAzRtv
9jCCVFcg3u6_Zg&ust=1429167610051731
85
CERTIFICATES : HOT TOPICS
l stay a bad quality cargo
86
CERTIFICATES : HOT TOPICS
ascertained by
the superintendent
rts and the certificates must
be
substantiated
time and
place of inspection (E.g. pre-shipment)
risk of

misleading a party, who might receive them at a later time, is
made
and
testing (USDA/ISO…)
Supervision, Sampling and Analysis
GAFTA COURSE 23/04/2019
Chris Ranschaert
SGS Group Management SA, Agriculture, Food & Life
88
GAFTA CONTRACTS
sealed as
required by the Sampling rules 124.
contract goods in
accordance with the custom of the port or as contracted :
According to the
Weighing rules 123.
89

GAFTA CONTRACTS
requirements for
supervision and sampling at Ports of Loading and Discharge are
contained within
the standard GAFTA Sampling and Analysis clause, which
reads:
For ports of loading:
“SAMPLING, ANALYSIS AND CERTIFICATES OF
ANALYSIS-
• Terms and conditions of GAFTA Sampling Rules No.124, are
deemed to be
incorporated into this contract.
• Samples shall be taken at time and place of loading.
• The parties shall appoint superintendents, for the purposes of
supervision and sampling
of the goods, from the GAFTA Register of Superintendents.
• Unless otherwise agreed, analysts shall be appointed from the
GAFTA Register of
Analysts.”
90
GAFTA
“SAMPLING, ANALYSIS AND CERTIFICATES OF

ANALYSIS-
• Terms and conditions of GAFTA Sampling Rules No.124, are
deemed to be
incorporated into this contract.
• Samples shall be taken at the time of discharge on or before
removal from the
ship or quay, unless the parties agree that quality final at
loading applies, in
which event samples shall be taken at time and place of loading.
• The parties shall appoint superintendents, for the purposes of
supervision and
sampling of the goods, from the GAFTA Register of
Superintendents.
• Unless otherwise agreed, analysts shall be appointed from the
GAFTA
Register of Analysts.”
91
GAFTA 124 SAMPLING RULES
VERSION 01/09/2018
92
GAFTA SAMPLING

• Quality results basically from its growth, harvesting and, in
some cases, it’s
processing
– Protein, moisture, admixture, fiber content...
• Condition Is said to be determined by factors that affect it
during
transportation or storage
– Contamination by pesticides, weevils, (sea)water
93
GAFTA SAMPLING : 1 SCOPE
contracts)
Preparation of the goods
94

GAFTA SAMPLING : 1 SCOPE
fishmeal, rice,
related to GAFTA contracts in bulk, bags or containers.
95
GAFTA SAMPLING : 2 DEFINITIONS
consignment of maximum 1 kilo in weight, or if taken
mechanically, weight appropriate to the equipment.
GATE SAMPLE)”: Is the accumulation,
combined total, of all the increment samples.
bulk
sample sealed into up to al least 3 kilograms containers each, in
as many containers as required by the rules
“ANALYSIS SAMPLES”: Samples are reduced from the
contractual samples, by the laboratories, to quantities
appropriate
for analysis tests.
tins
with close fitting lids of bags, including PE, cotton or other
suitable types of construction, which are securely tiedNEW

01/09/2018
96
GAFTA SAMPLING :
3 GENERAL TERMS
register
detailed instructions !!
sence of a superintendent
97
GAFTA SAMPLING : 4 METHOD OF DRAWING
• Mutually agreed
• Safety first
• Natural light or lightening

98
e and physically possible
Consignment size Tons 0-5000 5001-10,000
10,001 -
25,000 >25,000
Lot size Tons 500 1000 2500 5000
No. of increments per lot number min 20 min 30 min 40 min 50
Min bulk aggregate sample per lot Kilos 20 30 40 50
Max weight of increments Kilos 1 1 1 1
99
GAFTA SAMPLING : METHOD OF DRAWING
• Ship of 8000 MT
• 8 lots of 1000 MT
• Min 30 increments/lot of max 1 kg, but min 30 kg
• 8 x 30 kg (8 bulk aggregate samples) = 240 kg of samples
• Let’s say loading 400 MT/hour = 1 lot in 2,5 hour = 1
increment every 5 min
100

EXAMPLE 12000 MT
101
EXAMPLE 12000 MT
102
Example 12000 MMT
103
GAFTA SAMPLING : EXAMPLES
MT)
10,000 mt / 35,098 mt grain vessels,
FOB terms:
2,500 5,500 10,000 35,098 (excess <250mt)
bags of 3 kg
bags of 3 kg
are 3 kgs in 1 bag 2 bags of 3 kg 2 bags of 3 kg 7 bags
of 3 kg
bags of 3 kgs

104
GAFTA SAMPLING
from any
possible contamination
105
GAFTA SAMPLING
http://www.google.com/imgres?imgurl=http://www.enasco.com/
prod/images/products/8C/B01514WAt.jpg&imgrefurl=http://ww
w.enasco.com/whirlpak/Sampling+Equipment/Solid_Dry+Sampl
ing/?&sort=za&page=1&usg=__AuZrEElpFtkPI3O-
yIgQ_C6knBA=&h=100&w=100&sz=2&hl=nl&start=9&tbnid=z
_pdKLQkP7wYSM:&tbnh=82&tbnw=82&prev=/images?q=samp
ling+equipment+SCOOP&um=1&hl=nl&lr=&sa=G&tbs=isch:1
&um=1&itbs=1
106
GAFTA SAMPLING
107

GAFTA SAMPLING
&um=1&itbs=1
108
GAFTA SAMPLING
109
SAMPLING
Cross belt
sampler
110
AUTOMATIC SAMPLER
111

GAFTA SAMPLING : METHOD OF DRAWING
• Security and integrity of intermediate samples
• Division of bulk aggregate samples
• Reduction to the contractual sets
• Possibility to pre reduce (25 %)
• Sample containers shall be full
• Sealed
• Bulk at loading : moving stream – nearest practicle point
• Bulk at discharge : from the hold (safety !!) or nearest
practicle point
(moving stream)
www.wagtechprojects.com/products/Heavy-Duty-Boerner-
Divider-
.html&ei=AhcuVeWgH5KLuASsp4GoAg&bvm=bv.90790515,d.
c2E&psig=AFQjCNHQuhgeb7f45HGwhw7MGlNPpv1fhQ&ust=
1429170286987955
112
DIVIDING
113
DIVIDERS

DIVIDERS / SIEVES
114
GAFTA SAMPLING
115
GAFTA SAMPLING
shall be drawn uniformly, by a piercing
spear from the
top, middle and bottom of each bag : (if not possible by scoop –
from the
ends and middle of the bags in rotation)
<100 bags - sample 20 bags
<1000 bags – sample 50 bags
>1000 bags – sample 0,5 % or min 50
bags
116
GAFTA SAMPLING – ROAD & RAIL

• GRAINS : (wagons or vehicles) : increment samples
to be taken by spear from 3 sampling points from
each wagon or vehicle.
• FEEDINGSTUFF (wagons or vehicles) : increment
samples to be taken from moving stream at outlet
filling hopper by hand scoop
• Grain and feeding stuff increment samples by hand
scoop from moving stream at outlet wagons or
vehicles
117
• At loading of vessel:
– at the nearest practicable point to the vessel
– Concurrently with the loading, from a moving stream
– From conveyor, ex-silo, ex-vehicle/truck: across the
whole moving stream
– If loading by grab: from the quay or barge, from the bulk,
excluding the run
• At discharge of vessel:

– From various parts of the hold in a fair proportion,
excluding the run. Not considered safest point !
– If not possible (or not safe) draw increment samples at
the nearest practicable point to the hold, preferably from
a moving stream
– By hand scoop or other mutual agreed equipment
&um=1&itbs=1
118
GAFTA SAMPLING
Sender....................................................................................
.................................................................
M.V........................................................................................
................................................................
From.......................................................................................
...............................................................
To...........................................................................................
...............................................................
Commodity..............................................................................
...............................................................
Bags/Bulk...............................................................................
...............................................................

Marks.....................................................................................
..............................................................
.
Shipper/Seller/Buyer................................................................
..........................................................
..
Set No.................................................. Sample
No...............................................................................
Date and Place of
Sealing....................................................................................
................................
Quantity represented by this
sample………………………………………………………………
Part Total Quantity
of………………………………………………………………………
………
Purpose of
Sample…………………………………………………………………
…………………
*Arbitration (Quality/Rye Terms), Natural
Weight/Analysis…………………………………….
• *delete as appropriate
• D/O Receiver
Quantity
• B/L No.
• Seals
119

GAFTA SAMPLING
ARBITRATION
ons
tons)
– One set for each 5000 tons
» Sample 1: Analysis
» Sample 2: Arbitration
» Sample 3: Spare
Each sample packed in appropriate and sufficiently strong
material that maintains the quality and condition of the sample
with consideration to the type of test / analysis to be performed
NEW
01/09/2018
120
GAFTA SAMPLING
7. STANDING IN PROVISIONS (several receivers on a hold)
INSTRUCTIONS

• Reduction of samples at origin
• Within 14 consecutive day’s
• If failed : any claim, rejection : deemed to be waived and
barred.
. RETENTION OF SAMPLES
• 3 months (GMP+ = 6 months !)
121
GAFTA SAMPLING SECTION 2 : ANALYSIS
• Reduced from the contractual samples
• Certificates
• Notices clause
• Non compliance with the rules
122
WHEAT
http://www.google.com/imgres?imgurl=http://www.khalilpakist

an.com/wheat.bmp&imgrefurl=http://www.khalilpakistan.com/P
roducts.html&usg=__oh7HVovsqOhgC9ZD8QsXhjFy8M0=&h=
500&w=500&sz=733&hl=nl&start=1&tbnid=7h5Nxbmd0EDLB
M:&tbnh=130&tbnw=130&prev=/images?q=WHEAT&hl=nl&sa
=G&gbv=2&tbs=isch:1&itbs=1
123
WHEAT
124
WHEAT
commodity
e – Fertile soil & temperate climate
- Based on Protein content (9-14%), based on Kernel
texture
(hard, semi hard, soft), based on Colour (white, amber, red)
125
UNCERTAINTY
Lot Sample Analysis

Total error
Sampling error Analytical error
Sample
preparation
Sampling
preparation
error
126
GAFTA SAMPLING DIFFICULTIES
127
GAFTA SAMPLING RULES : 2018
IONS SHALL BE GIVEN TO THE
SUPERINTENDENTS TO TAKE ADDITIONAL SAMPLES
stuffs and
/ or grain, Corn = 10 kg

NEW
01/09/2018
128
DIFFERENT KIND OF VARIABLES
uous variables
• Continuous variable e.g. protein, moisture, oil content,…
– Each kernel has a certain value
– Normal distribution – Gauss
– 2 (-1 +1) sigma : 68 %
– 4 (-2 +2) sigma : 95 %
– 6 (-3 +3) sigma : 99 %
http://upload.wikimedia.org/wikipedia/commons/8/8c/Standard_
deviation_diagram.svg
129
EXAMPLE : CONTINEOUS VARIABLES
• 68 % between 41.255 and 43.495
• 95 % between 40.135 and 44.615

42.5 42.3 43.6 43.7
41.8 42.6 42.8 42.4
40.3 42.4 40.8 41.4
43.8 42.9 43.7 40.4
44 41.1 42.6 42.4
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0 5 10 15 20
Chart20.00000000310.00000269670.00051066450.0209101880.
1851394250.35445295320.14673611070.01313512240.0002542
4360.0000010641
Sheet110.30.064103389512.375mean10.40.07532162521.12056
14194sdev10.80.132582874611.10.18635750411.40.2438248879
0.032030840211.80.312102864312.30.355223460312.40.355931
410512.40.355931410512.40.355931410512.50.353811781412.6

0.348914938612.60.348914938612.80.331312643412.90.319013
587713.60.195868124313.70.176956015513.70.176956015513.8
0.1586018308140.12439926820.45.54677902620.00000000310.
56.93347378280.00000269670.68.32016853930.00051066450.7
9.70686329590.0209101880.811.09355805250.1851394250.912.
4802528090.3544529532113.86694756560.14673611071.115.25
364232210.01313512241.216.64033707870.00025424361.318.0
2703183520.0000010641
Sheet1
Sheet2
Sheet3
130
AN EXAMPLE
131
EXAMPLE : DISCONTINEOUS VARIABLES
• Discontinuous (discrete) variables
– On/Off variables: e.g. damaged grains, GMO,…
– Binomial distribution / Poisson distribution
132
AN EXAMPLE
Sample 10 balls

– Chance to find 0 black balls: 81.71 %
– 1 16.67
– 2 1.53
Sample 100 balls
– Chance to find 0 black balls: 13.26 %
– 1 27.06
– 2 27.34
– 3 18.22
– 4 9.02
– 5 3.53
0
0.05
0.1
0.15
0.2
0.25
0.3
0 1 2 3 4 5 6
Chart40.13261955590.27065215490.27341391160.1822759410.
09020799120.03534680470.0114215866
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1.585911 20.42 20.50 20.46 1.395912 20.26 20.29 20.28
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0.235929 20.04 19.94 19.99 -0.075930 19.99 20.06 20.03
0.035931 19.80 19.90 19.85 -0.515932 19.46 19.49 19.48 -
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1.885935 19.96 19.92 19.94 -0.235937 20.03 20.04 20.04
0.075939 20.27 20.25 20.26 0.7685940 20.32 20.28 20.30
0.895941 20.40 20.40 20.40 1.205942 19.39 19.35 19.37 -
2.005943 20.29 20.25 20.27 0.805944 21.59 21.64 g 21.62
4.985945 19.97 19.90 19.94 -0.255946 20.48 20.56 20.52
1.575947 20.04 20.00 20.02 0.025948 20.09 19.76 c 19.93 -
0.285949 19.98 19.90 19.94 -0.235950 23.22 23.30 g 23.26
10.095951 19.10 19.40 c 19.25 -2.375952 19.74 19.90 19.82 -
0.605953 19.68 19.70 19.69 -1.015954 20.01 20.03 20.02
0.025955 19.82 19.84 19.83 -0.575956 20.42 20.26 20.34
1.015957 20.30 20.38 20.34 1.015958 19.88 20.01 19.95 -
0.215959 19.70 19.76 19.73 -0.885960 20.16 20.26 20.21
0.615961 20.55 20.62 20.59 1.775962 21.48 21.54 g 21.51
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0.135965 19.89 19.95 19.92 -0.295966 20.15 20.08 20.12
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0.405907 19.97 19.77 19.87 -0.455908 20.57 20.58 20.58
1.745909 20.25 20.21 20.23 0.675910 19.57 19.44 19.51 -
1.585911 20.42 20.50 20.46 1.395912 20.26 20.29 20.28
0.815913 19.96 19.95 19.96 -0.185914 20.08 20.08 20.08

0.215915 19.57 19.49 19.53 -1.505916 20.50 20.62 20.56
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0.895941 20.40 20.40 20.40 1.205942 19.39 19.35 19.37 -
2.005943 20.29 20.25 20.27 0.805944 21.59 21.64 g 21.62
4.985945 19.97 19.90 19.94 -0.255946 20.48 20.56 20.52
1.575947 20.04 20.00 20.02 0.025948 20.09 19.76 c 19.93 -
0.285949 19.98 19.90 19.94 -0.235950 23.22 23.30 g 23.26
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0.605953 19.68 19.70 19.69 -1.015954 20.01 20.03 20.02
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1.015957 20.30 20.38 20.34 1.015958 19.88 20.01 19.95 -
0.215959 19.70 19.76 19.73 -0.885960 20.16 20.26 20.21
0.615961 20.55 20.62 20.59 1.775962 21.48 21.54 g 21.51
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0.135965 19.89 19.95 19.92 -0.295966 20.15 20.08 20.12
0.315967 20.34 20.38 20.36 1.085968 19.82 19.89 19.86 -
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12.5540.0902079912195319.5312.2062550.0353468047205620.
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97719.7712.35625195919.5912.24375199419.9412.4625199919.
9912.49375200320.0312.51875198519.8512.40625194819.4812.
175199719.9712.48125194119.4112.13125199419.9412.462520
0420.0412.525202620.2612.6625203020.312.6875204020.412.7
5193719.3712.10625202720.2712.66875216221.6213.51251994
19.9412.4625205220.5212.825200220.0212.5125199319.9312.4
5625199419.9412.4625232623.2614.5375192519.2512.0312519
8219.8212.3875196919.6912.30625200220.0212.5125198319.83
12.39375203420.3412.7125203420.3412.7125199519.9512.4687
5197319.7312.33125202120.2112.63125205920.5912.86875215
121.5113.4437520002012.5200620.0612.5375199219.9212.4520
1220.1212.575203620.3612.725198619.8612.4125187718.7711.
7312520.05880597010.6183005114
Sheet3
133
SAMPLING FOR MYCOTOXINS
-uniform distribution
Aflatoxine (ppb)
Aflatoxine avg. 10 ppb
0 0 0 0
0 0 0 0
0 0 0 0
0 200 0 0
0 0 0 0

134
IMPORTANT FACTS ABOUT SAMPLING
• Perform correct, representative sampling, with high amount of
increments and use a boerner or riffle divider for sample
division
to make the composites.
• Don’t go for anything less than GAFTA rules !
• Lab portion for homogenization as high as practically
possible,
should never be less than ca. 500 g, preferably 1 kg or more
135
SAMPLING & CERTIFICATES
sealed as
required by the Sampling rules 124.
performed at
regular intervals throughout entire loading/discharging at the

nearest
practicable point of the vessel (as applicable) as per GAFTA
124
sampling rules. One composite sample of the total consignment
proportionally mixed was submitted for analysis in a reputable
laboratory
and we report the average actual result as follows: XXX”
136
SAMPLING & CERTIFICATES
• Not representative sampling
• Also for packed goods
• GAFTA Sampling Rules : taken at the time and place of
loading
GAFTA 123 WEIGHING RULES
VERSION 2010
London 23/04/2019
Chris Ranschaert
SGS Group Management SA – Agriculture, Food & Life –
138
WEIGHING – WHY WEIGH ?

• The value of a consignment in bulk is determined by its
grade and weight.
• Payment of material costs depend directly on the results
obtained,
• Weight is to be determined by weighing upon scales that
are known to be accurate within the limits of tolerance
stated in scale specifications
• Weighing tolerances must be in accordance with the legal
requirements for accuracy of commercial weigh scales.
• All weighing differences should be within acceptable
tolerances.
139
WEIGHT CONTROL : ASCERTAINMENT OF WEIGHT
national standard can be used. Owners of such scales are
responsible for ensuring that periodical calibrations are
performed by a competent person and they must be in
possession of the stamped and signed calibration certificates.
For simplicity:

<0.05%
must be <0.1%
brated at least every two
years or when necessary as per local rules. Many country
calibrations are valid for one year.
140
WEIGHT CONTROL
– weighbridge or mechanical automatic
hopper scales.
• Prior to the commencement of loading and/or discharge, the
weighing equipment should be balanced and/or zeroed when
empty .
-Automatic weighing machines
• Weighbridge- Road vehicles
• Weighbridge – Rail wagons
• Non-continuous automatic weighing.
– Within this classification are many bulk weighing machines
which in
turn are classified as either non-continuous weighing such as
mechanical electronic hopper machines in Silos
• Continuous automatic weighing machines

– Equipment which requires no human intervention., or
continuous
weighing machines such as continuously totalizing conveyor
weighers (Belt weighers)
141
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
ing the terms and conditions of
the Grain
& Feed Trade Association (GAFTA), unless mutually agreed
otherwise.
142
• Dock authorities
• Public sworn weighers / superintendents
• Recognized weighers by local public
• Customs of the port

weighing
equipment in a secure route.
143
an allowance
mutually agreed
disposal
• checks not be able to be made, or denied,
• found to be at fault
• parties to the contract are to mutually agree upon the
loaded/discharged
weight.
• arbitration
144

AUTOMATIC
HOPPER SCALES)
• Weighing equipment should be balanced and/or zeroed when
empty
• The right to secure the weighing equipment
• Static checks, where appropriate, to be performed
• Checking on a 2e scale with same commodity
145
146
147
Hopper scale
Train unit
Load cells

148
INSTRUMENTS
(BELT WEIGHERS)
weighing.
the continuous flow can be
accurately recorded.
certificate.
149
150
ethods of
establishing weights

purposes, unless both parties to the
contract explicitly accept this method in
writing
151
basis of an analysis made
of the
samples of the damaged and undamaged part of the goods.
152
- ROAD VEHICLES & RAIL
WAGONS
zeroed when empty
weighed gross and tare.

-axle weighing will not be
accepted.
153
154
WEIGHT CONTROL
relevant in the case of bulk grain and or oil seed shipments .
• These could be errors or inaccuracy of measurement during
draft
surveys, on weighbridges, or in silo weightings.
• These include loss due to spillage or dust, plus any loss of
moisture content in the cargo, which could be affected by delays
in the voyage, high or low ambient air or sea temperature and
differing relative humidity's..

• Loss of weight in bulk grains may occur by the simple process
of
evaporation or drying out and respiration This is due to the
inherent nature of grain.
155
WEIGHT CONTROL
OF WEIGHT LOSSES
• 1. Normal "in service" inaccuracy of loading/discharging
scales.
• 2. Natural loss of cargo due to variation of moisture, heat
transfer, inherent nature of the cargo
• 3. Real losses of grain between silo and vessel at loading,
and between vessel and silo scale at discharge, i.e.
sweepings/dockage, and -including "Shrinkage".
156
THE CUSTOMARY TRADE LOSS
• Must be accurate as practical within acceptable confidence
limits.
• Due to complexities in accurate measurement differences of
0.5% are regularly termed the “Customary Trade Loss” or

”Shrinkage Allowance” in grain as well other bulk cargoes.
• Apparent Loss. Due inaccuracies in scales/draft survey
• Real Losses. Due handling losses, spillage or dust,
moisture loss.
• A third form of loss, not recognized, could include the
manipulation of scales, figures or calibrations.
tiy shipments should be
under the ”Customary Trade Loss’ of 0.5%
157
LOSS ?
158
WEIGHT SHORTAGES : POSSIBLE CONTRIBUTING
FACTORS
SHORTAGES
Scale
calibrationMethods
Lack of
EquipmentPeople
Bad handling of

transportation
Natural
Losses and
Real losses
Length of
Chain
SecurityNon Ethical
Players
Weather conditions
Improper calibration
Dynamic to static effects
‘Unknown’ technical issues
External factors
Frequency of calibration
Cost of security
Lack of focus on security
Lack of coordination
with port authorities
Silo /Plant operation and lack
of security in silo / plant areas
Weigh (filtered dust)

Non-standardization of
D/S method or lack of
implemenation
Scales to D/S
differences
Absence of implementation
of standardized working
procedures
Geography
Number of origins
Simultaneous loading
Laptop, hydrometer,
water paste, tapes
External documents
(barge, vessel data)
Cargo
Handling
Equipment
Moisture
Training
Cost
Expertise

Corruption
Internal audits
Overtime
Leakage
Customary trade
losses
Money
Frightened to loose
a job
Compensate
bonus losses
Client pressures
Commercial
consideration
Maintain good
relations
Doing the best
for clients
Multiple handling
Theft
Lack of port security

159
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Break
@Gaftaworld
Sampling Exercise &
Feedback
@Gaftaworld
Evening networking
Dinner venue
The Crypt, Ely Place, Holborn
Time
17:30 – 21:00
Directions:

Metropolitan/Circle Lines from Great Portland
Street Station to Farringdon Station, then a 5
minute walk to Ely Place.
Central Line from Oxford Circus Station to
Chancery Lane Station, then a 5 minute walk to
Ely Place
@Gaftaworld
Summary
Jonathan Waters
General Counsel
Gafta
Gafta GPD�Trade Foundation CourseWelcome and
introduction� HousekeepingBasic principles of contracting�
English Contract LawSlide Number 6Slide Number 7Slide
Number 8Contract Formation�Why Gafta Contracts?�Slide
Number 11Slide Number 12Slide Number 13Slide Number
14Slide Number 15Slide Number 16Slide Number 17Slide
Number 18Basic contractual obligations and contractual terms�
Slide Number 20Slide Number 21Slide Number 22Slide Number
23Slide Number 24Slide Number 25Identifying a Condition or
WarrantySlide Number 27Slide Number 28Intermediate
TermsSlide Number 30Which Approach?Slide Number 32Sale
of Goods Act 1979 (Refresher)Description – (S13)Satisfactory
QualityCertificate Final (1)Certificate Final (2)Excluding the

Sale of Goods ActRefreshments�Gafta Contracts: An
introduction�Slide Number 41Slide Number 42Slide Number
43Slide Number 44Slide Number 45Slide Number 46Slide
Number 47Slide Number 48Slide Number
49Lunch�Responsibility and risk� ��What do we mean by
Risk and Responsibility?Categories of RiskWhat is a
Contract?FOBFOB BuyerFOB SellerCIFFOBCIFRisk in the
GoodsRisk in the GoodsShipment RisksShipment
RisksDocumentary RisksDocumentary RisksDocumentary
RisksLegal & Political RisksExecution RisksMarket
RisksInstruction for Supervision�ISSUING INSTRUCTIONS :
Ensuring clarity and best practice��RULES AND CODE OF
CONDUCT FOR SUPERINTENDENTSRULES AND CODE OF
CONDUCT FOR SUPERINTENDENTSACCEPTING
INSTRUCTIONS FROM THE CLIENTACCEPTING
INSTRUCTIONS FROM THE CLIENT�ACCEPTING
INSTRUCTIONS FROM THE CLIENTSOME ISSUESSlide
Number 83Slide Number 84CERTIFICATES : HOT
TOPICSCERTIFICATES : HOT TOPICSSlide Number
87GAFTA CONTRACTSGAFTA CONTRACTSGAFTAGAFTA
124 SAMPLING RULESGAFTA SAMPLINGGAFTA
SAMPLING : 1 SCOPEGAFTA SAMPLING : 1 SCOPEGAFTA
SAMPLING : 2 DEFINITIONSGAFTA SAMPLING : 3
GENERAL TERMSGAFTA SAMPLING : 4 METHOD OF
DRAWINGGAFTA SAMPLING : 4 METHOD OF
DRAWINGGAFTA SAMPLING : METHOD OF
DRAWINGEXAMPLE 12000 MTEXAMPLE 12000 MTExample
12000 MMTGAFTA SAMPLING : EXAMPLESGAFTA
SAMPLINGGAFTA SAMPLINGGAFTA SAMPLINGGAFTA
SAMPLINGGAFTA SAMPLINGSAMPLINGAUTOMATIC
SAMPLERGAFTA SAMPLING : METHOD OF DRAWING
DIVIDINGSlide Number 113GAFTA SAMPLINGGAFTA

SAMPLINGGAFTA SAMPLING – ROAD & RAILGAFTA
SAMPLING : 4 METHOD OF DRAWINGGAFTA
SAMPLINGGAFTA SAMPLINGGAFTA SAMPLINGGAFTA
SAMPLING SECTION 2 :
ANALYSISWHEATWHEATWHEATUNCERTAINTYGAFTA
SAMPLING DIFFICULTIESGAFTA SAMPLING RULES :
2018DIFFERENT KIND OF VARIABLESEXAMPLE :
CONTINEOUS VARIABLESAN EXAMPLEEXAMPLE :
DISCONTINEOUS VARIABLESAN EXAMPLESAMPLING
FOR MYCOTOXINSIMPORTANT FACTS ABOUT
SAMPLINGSAMPLING & CERTIFICATESSAMPLING &
CERTIFICATESGAFTA 123 WEIGHING RULESWEIGHING –
WHY WEIGH ?WEIGHT CONTROL : ASCERTAINMENT OF
WEIGHT��WEIGHT CONTROL�WEIGHT CONTROL :
GAFTA 123 WEIGHING RULESWEIGHT CONTROL : GAFTA
123 WEIGHING RULESWEIGHT CONTROL : GAFTA 123
WEIGHING RULESWEIGHT CONTROL : GAFTA 123
WEIGHING RULESWEIGHT CONTROLWEIGHT
CONTROLTHE CUSTOMARY TRADE LOSS�LOSS
?WEIGHT SHORTAGES : POSSIBLE CONTRIBUTING
FACTORSSlide Number 159Break�Sampling Exercise &
Feedback�Evening networkingSummary�
Gafta GPD
Trade Foundation Course
23rd – 26th April 2019

London
Day Two
@Gaftaworld
Introduction to Shipping
Roger Rookes
Gafta Arbitrator
@Gaftaworld
Introduction
Our business is the movement of goods from one place to
another by sea.
Many different roles are involved, not just inland at the origin
and destination but also specifically for the shipment of goods:
exporters / importers / brokers and associated stevedores,
superintendents, agents, fumigators, customs officials, health
inspectors etc.
Other speakers will deal specifically with some of these roles.
@Gaftaworld

Predominantly, our goods are moved in bulk, but also in bags
and/or in containers.
There are thousands of commercial vessels:
- bulk carriers
- general cargo ships (tween deckers)
- container ships
- ro-ro
- tankers (both mineral and vegetable oil)
- gas carriers
- specialist vessels (e.g. heavy lift)
Introduction (2)
@Gaftaworld
DIFFERENT TYPE OF BULK CARRIERS
Restricted number of ports / commodities
Iron Ore + Coal

Iron Ore + Coal + Grain + Sulphur + Coke + Petcoke +
Phosrock +Bauxite + Alumina +…
Iron Ore + Coal + Grain + Sulphur + Coke + Petcoke +
Phosrock + Bauxite + Alumina + Steel + Mineral Concentrates
+ Salt + Rice + Tapioca + Sugar + Pig iron + Potash +Cement +
Clinker + Scrap Large number of ports / commodities
+…
@Gaftaworld
Ship’s particulars
Main particulars

(WATER) DRAFT
Freeboard
Beam
Air Draft
Water line to top of hatch-cover
Keel
Water line
@Gaftaworld
Ships’ particulars II
@Gaftaworld
What to think about when fixing a vessel…
Tramp or liner?

Size:
Contract quantity
Grain capacity
Gear
Port limits (access, draft, aircraft, cargo equipment)
Water - fresh, salt, brackish
Vessel size (LOA, Beam, max draft, height to hatch coamings,
DWT, airdraft)
Class
P&I cover
@Gaftaworld
Stowage Factors
Safe stowage
TPC or TPI
Commoditycu.ft/mt
cu.m/mtWheat45/501.27/1.42SBM501.42Maize50/531.42/1.5Bar
ley52/551.47/1.56Steel billets180.51
@Gaftaworld
The container revolution (1)
Historically, containers for shipping goods were not one
standard size
Goods were loaded in a variety of items, such as sacks, barrels
and other boxes, making the loading operation a bit like a

jigsaw puzzle
@Gaftaworld
@Gaftaworld
The first standard-sized shipping container was introduced in
the 1950s
Having a uniform container had several advantages:
Increased speed of loading
Better security of cargo
Reduced cost of loading
@Gaftaworld
Container Types
Dry
Refrigerated
Specialized
Flat Rack

Open Top
Tank
Container sizes
Standard width = 8 feet
Heights
Standard = 8 feet
High Cube = 9 feet 6 inches
Lengths
Standard = 20, 40 & 45 feet
Others = 10, 30, 48 and 50 feet
Industry measurement
1 TEU = 1 twenty foot equivalent unit
1 FEU = 1 forty foot equivalent
@Gaftaworld
The movement of goods
The shipping documents should record the history of the
movement:
- Mate’s Receipt or Bills of Lading
- Certificate of Origin
- Certificates of Weight / Quality etc
- Phytosanitary and Fumigation Certificates
- Insurance Certificate
Who issues them? What terms do they show?

@Gaftaworld
Timeline of a transaction & key parties
With seaborn bulk trade it all starts with a buyer and a seller
each located in different countries and needing logistical
arrangements to complete their trade.
These services include:
Storage
Transportation
Insurance
Brokerage
Supervision
Freight forwarding
Laboratory analysis etc
@Gaftaworld
Broker (commodity)
Put together Buyer & Seller and helping them confirm a trade.
Broker (shipping)
Assists either Seller (CIF or C&F) or Buyer (FOB) to find
vessel
Bank

Finances the operation
Usually draft and confirm contract
Helps negotiate charterparty terms
Drafts charterparty or contract
Cargo side: CAD, L/C, prepayment, performance bond etc
Insurer
Usually via a broker
Either:
CIF: Marine and storage policy
FOB/C&F: Sellers interest policy
Operators/Execution
Freight: Operators

Cargo: Execution
Take over contract and charterparty
Typically take over ancillary service providers
Timeline of a transaction & key parties
@Gaftaworld
Warehouse/silo
Receive, store & deliver goods on board vessel
Stevedores
Where mandatory
Superintendent
Supervise loading & discharge

Issue warehouse receipt
Check quantity through SMA (stock monitoring agreement) or
CMA (collateral management agreement)
May operate cranes if required
In port or where goods handling is needed
Carry out sampling
Ascertain weight, quality & condition
Issue certificates
Vessel master
Usually First officer or First Mate
Supervises whole loading operation
Issues Mate’s receipts (before B/L)
Laboratory

Runs analysis of samples against contract specifications
Other service providers
Fumigation
Execution staff
Check certificates
Bank
Check documents against L/C
Phytosanitary sampling analysis
Certification of origin
Issue certificates of above
1st tier issues
Cargo underwriters

Average adjusters
P&I
2nd tier issues
Legal services
Mediation
Arbitration
Transactional process in the shipping of goods.
From negotiation and loading through to discharge at
destination.
The example attached in the following slides includes reference
to the physical contract for the goods, the associated
charterparty to transport the goods and then payment for the
goods under a letter of credit.
With the example used there are in fact three specific
contracts which make up the transaction.
The first is the Physical Contract for the goods.
The second is the Contract governing transport, in this case the
Contract of Carriage (Charterparty).
And the third is the contract and obligations surrounding the
payment terms associated with a Documentary Letter of Credit
(L/C).

We have attempted to make the example relatively
uncomplicated and consequently the Buyer is also the end
receiver. Clearly however, there are many permutations
associated with the transaction of goods and their delivery. The
commentary given within the slides is not intended to be
comprehensive enough to cover all eventualities but
nevertheless it does give an indication of the elements of a
transaction that the participant in this course will need to
consider in greater detail.
@Gaftaworld
Goods remain in silo/warehouse for ultimate receiver
Seller’s Stevedores complete loading at Seller’s load port
Buyer presents vessel to Seller
Buyer agrees Charterparty with Vessel Owner
Seller collates docs inc;
Invoice, Quality cert, Phyto,
B/L
Master signs B/L - Receipt to Sellers for goods loaded
Superintendent provides quality cert & any other relevant
quality docs to Seller
Seller presents all required docs to Buyer’s bank for payment
Buyer opens L/C on Buyer’s Bank
Bank checks docs against L/C & pays Sellers if all in order
Vessel arrives at Destination
Stevedores unload the goods into storage on behalf of Buyer
Physical contract negotiated
Parties
Broker
FOB Seller

FOB Buyer (end receiver)
Physical contract timeline
@Gaftaworld
Contract of carriage (Charterparty) timeline
Charterparty will include amongst many other things;
cancelling dates, laydays, despatch & demurrage rates.
Buyers’/Charterers’ Freight Forwarding team, will monitor all
aspects of the charter from the initial charter fixture, through to
discharge of the vessel.
Payment terms will depend on whether ‘Voyage’ or
‘Timecharter’
Many of the parties responsibilities and liabilities rests with the
type of charter
Parties
Broker
FOB Buyer
(end receiver)
Vessel owner
Charterparty negotiated. FOB buyer becomes the ‘Charterer’
@Gaftaworld
Shipping documents
Diane Galloway
Gafta Arbitrator

@Gaftaworld
Bills of lading and their functions
What is a B/L?
A document issued by or on behalf of the carrier, to a person
(usually shipper), who has contracted with the carrier for the
carriage of the goods to the place of delivery.
Usually negotiable and transferrable
Parties:
Carrier, shipper, consignee/ holder
A vital document as relied upon by all parties to the transaction
3 functions:
Receipt for the goods – proof of loading in good condition by
the seller
Evidence of the contact of carriage – ship owner / bill holder
Document of title – the ‘key to the cargo’
@Gaftaworld
The overview of contracts
Sale/Purchase Contracts
Banking Contracts
Carriage Contract
Insurance Contract

@Gaftaworld
Bills of lading: a transferable contract
Transfers rights to delivery of the goods
Transfers contractual rights against the shipowner
Sale contract risk passes on shipment – so buyer looks to
shipowner if goods arrive damaged
Buyer is entitled to a “reasonable contract of carriage” for the
goods under the sale contract
@Gaftaworld
What will you see on bills of lading 1?
Front contains specifics:
Ports of loading and discharge
Carrying vessel and any incorporated charterparty
Shipper/consignee/notify party / “To Order”
Signature box
Issue date / shipped on board date
Whether freight is paid [why important?]
“shipped” in “apparent good order and condition”
“weight, measure, quantity, quality…unknown”
@Gaftaworld

What will you see on bills of lading 2?
Reverse contains standard terms – few term – lots of
Reverse will also have any endorsements
Other terms are incorporated by operation of law (e.g. Hague
Visby Rules)
Often issued in triplicate:
Now, as is commonplace, GAFTA contracts require the full set
to be delivered to the shipper – reduces the risk of the originals
falling in the wrong hands.
@Gaftaworld
Types of bills of lading
Clean/Claused Bills
Short Form Bills
Freight PrePaid/Freight Payable as per C/P
Combined Transport Bills / Through Bills
Charter Party Bills – contrast Charterers’ Bills
Straight Bills
Switch Bills
Spent Bills
Liner Bills
@Gaftaworld

Common issues
Identity of the carrier – usually shipowner
Who should sign the bill of lading? Master or Agent
Incorporation of charterparty terms into bill of lading contracts
Is the charterparty incorporated or which charterparty is
incorporated (if more than one)?
Which terms?
Who can ask the carrier for the goods at the discharge port?
Delivery of cargo without production of bills of
lading/misdelivery
Change of voyage and deviation
Discrepancies in loaded quantities
Ante or post dated bills of lading [why important?]
@Gaftaworld
Mates Receipts
What is a Mates Receipt?
A document drawn up prior to the B/L – shipper’s interim
receipt when good are delivered to the ship owner
Why use a Mates Receipt?
It contains details of the goods loaded and any qualifications
It shows entitlement to the B/L - evidence of ownership, but not
a document of title/not negotiable
Sometimes used to obtain payment
Important distinctions between Bs/L and Mates Receipts
NOT a document of title
NOT evidence of a contract of carriage
Does NOT transfer rights against the carrier

@Gaftaworld
LoIs – Letters of Indemnity
Contractual agreement to indemnify a party if they do what you
are requesting
Examples:
Discharge without Bs/L
Rain LoIs
Missing documents
Take care: LoIs carry with them huge (potential) liabilities
@Gaftaworld
Invoices
Addressed to buyer, describing the goods
Contract price: good practice to invoice separately for
demurrage etc
Usually includes any contractual allowances
Should give payment instructions (where/when)
Specific requirements in UCP600 for letter of credit sales
[Payment terms: talk tomorrow]
@Gaftaworld

Certificates 1
Contract should state exactly what is required and from whom
GAFTA contracts have requirements to incorporate weighing
and sampling rules
Certificates are part of “Shipping Documents”
Inconsistencies and defects? What are the remedies (i) if
deviation is slight? (ii) if deviation is significant?
Documentary duties are important: (i) buyer will usually pay
against the shipping documents (ii) compliance with the
contract terms will be demonstrated by the shipping documents
and the certificates may be “final” (binding) between Buyer and
Seller. The Seller will usually want to retain control of the
documents until payment is made.
When must shipping documents be presented under the sale
contract to the buyer?
@Gaftaworld
Certificates 2 (“phytos”)
What are phytosanitary certificates and who issues/what are
they for?
Why are they a problematic issue in practice? (strict obligation
to provide the document but unknown destination/changes in
regulations).
What do the GAFTA contracts say now?
Obligation is one of best endeavours where there is a change in
regulation or country of import unknown to seller at date of
contract;
Not application to all GAFTA contracts;

How does this apply to FOB contracts or CIF with a range of
destinations?
Should FOB buyers now include a range of possible destinations
in all contracts to overcome this?
@Gaftaworld
Case Studies
Case Study 1:
You are a CIF seller. Your execution department wishes to
present two original B/Ls to the Buyer via the Bank and send
one directly to the Buyer. Is this sensible or possible?
Case Study 2:
Your CIF buyer wants to discharge against an LOI because
documents are not yet available at the discharge port. The
relevant contract is GAFTA 100. What should you do?
Case Study 3:
You bought on CIF Ravenna terms and the Seller presents a B/L
for destination “Main Italian Ports”. What should you do?
Case Study 4:
You are a CIF Buyer. Seller presents a B/L stating: “400MT off
loaded due to wetting after loading” and “wheat is dusty and
seems old”. Is this a clean B/L?
@Gaftaworld

Refreshments
@Gaftaworld
Case study session: Shipping documents
Diane Galloway
Gafta Arbitrator
@Gaftaworld
Ascertaining the goods and the vessel
Diane Galloway
Gafta Arbitrator
@Gaftaworld
Nomination
Definition of FOB Contract

"The Seller must at his own expense put the goods on board a
ship which has to be nominated or designated by the Buyer. The
Seller is not bound to reserve shipping space in advance nor to
bear any expense of shipment which arises after the goods have
been put on board.”
GAFTA FOB contracts have a “Delivery Period”, which is for
the arrival of the Buyer’s vessel at the loadport.
@Gaftaworld
37
Buyer’s duties are to give:
Effective Shipping Instructions (i.e. present a performing vessel
at the agreed load port)
So that Sellers can deliver goods in accordance with the terms
of the contract i.e. place, quantity, time
Adequate Notice (i.e. Nomination)
Either agreed period of time e.g. 10 consecutive / 3 business
days, or other sufficient period of time according to
circumstances (if contract is silent).
Substitution
Usually the buyer has a contractual right to substitute a
nominated vessel provided replacement vessel fulfils all the
requirements of the contract. (Cargill v Continental (1989))
Restricted in some contracts due to practical & administrative
problems.
@Gaftaworld

38
Seller’s duties
Deliver goods on board when required by Buyer during agreed
period;
No obligation to have goods available during entire period
(Tradax v Italgrani (1986)).
Deliver at agreed rate (e.g. tons per day) or otherwise
reasonable rate in customary manner.
Usually Seller will pay damages for the delay to the vessel if he
does not deliver at the agreed rate, usually demurrage.
@Gaftaworld
39
Service of Nomination Notice
See for example GAFTA 64, clause 6.
Nomination is a Notice to be served under the contract. Check
provisions carefully (notices clause, how many days, what
information).
Local time of sender applies to service. Notice valid via broker.
Usually the period of notice is expressed as a number of days or
hours preceding the estimated date of arrival (eta) and readiness
to load.
@Gaftaworld

40
Content of Nomination. 1
Name of the vessel
GAFTA 64 clause 6 – name of vessel is required.
"T.B.N." vessels (to be nominated)
By definition, the designation of a vessel yet to be nominated is
not valid.
Nomination of m/v "Santa Celia" “OBN” (or better name) or sub
vessel - must consider any contractual right of substitution.
@Gaftaworld
41
Estimated tonnage required (usual in practice to simply re-state
the contract tolerance – 30,000 mt +/- 10% - but is this
sufficient?)
Probable readiness date:
Readiness, not simply arrival.
Contracts often require updates – e.g. “Master to provide
10/7/3/1 day notices of eta to seller”.
Further information:
Ship's Agents, Superintendent, Documentary requirements, Rate
of Demurrage...?
Nomination must be honestly or reasonably given –
No Mickey Mouse vessels
No fanciful eta’s
But no need to have fixed vessel

@Gaftaworld
42
Substitution
New express terms with regard to substitution in many GAFTA
contracts;
Problem was whether new nomination needed new pre advice
and whether there was enough time for this;
“The Buyer has the right to substitute any nominated vessel.
Buyer’s obligations regarding pre-advice shall only apply to the
original vessel nominated. No new pre-advice is required to be
given in respect of any substitute vessel, provided that the
substitute vessel arrives no earlier than the estimated time of
arrival of the original vessel nominated and always within the
delivery period”.
“Notice of substitution to be given as soon as possible but in
any event no later than one business day before the estimated
time of arrival of the original vessel”.
@Gaftaworld
43
Failure to Nominate
Failure to nominate at all or failure to nominate correctly gives
rise to breach:
Seller may reject a defective nomination, or refuse to load a
vessel not nominated correctly.
Seller may declare Buyer in default if there is no valid
nomination in time BUT note extension clauses.

Subject to the particular contract, Buyers may substitute with
effective nomination.
Contrast:
(a) 7 day notice required, 3 days notice given. Seller does not
have to load until full 7 days elapses, even if vessel tenders
NOR (Notice of Readiness) earlier;
(b) 7 day notice required, no extension, only 4 days left in
Delivery Period. Too late for any valid nomination. Seller
could declare default.
@Gaftaworld
44
APPROPRIATIONS
@Gaftaworld
45
CIF / C&F contracts
Performance of a CIF / C&F contract:
Seller to make shipment of goods of contract quantity and
description at the agreed time;
Seller to provide a contract of carriage (usually Bill of Lading)
to the agreed destination;
Seller to present contractual shipping documents.
Risk of loss or damage to the goods passes on shipment
Title to the goods? GAFTA contracts are silent …

@Gaftaworld
46
Functions of the Appropriation
Advise Buyer of performance -
Expectation of documentary details,
arrange finance,
likely day of physical receipt of goods, carrying vessel details
to arrange discharge,
onward transmission to sub-buyers;
Notification of Insurance risk
(important in C&F contracts SoGA 1979 s. 32)
@Gaftaworld
47
Service of Notice. 1
Appropriation is a notice to be served under the contract. Check
provisions carefully.
Usually the period is stipulated in the contract as a number of
days following the date of the Bill of Lading. E.g. GAFTA 100 -
10 days.
In relation to the original notice from the Shipper, this period
cannot be extended by non-business days.

@Gaftaworld
48
After the service period has expired....
In relation to re-sellers, an appropriation is still in time if
received after 16.00 hours on a business day and passed on by
16.00 hours on the next business day.
If received before 16.00 hours, the appropriation must be passed
on the same calendar day.
@Gaftaworld
49
Notice to Broker / Agent named in the contract is valid and
binding between Seller and Buyer.
Valid notice of appropriation cannot be withdrawn without
Buyer's consent. [contrast vessel nomination on FOB
contract…]
Invalid appropriation may be replaced if time available.
@Gaftaworld
50
Content of Appropriation. 1

Name of vessel
Must be accurate – not open to substitution. Use of “or better
name” only valid for genuine errors in transmission;
Presumed weight shipped
Must be specific. No tolerance e.g. 1,000 mt 10% “Shipped”
means “on board”.
@Gaftaworld
51
Content of Appropriation. 2
Bill of Lading date:
The Notice must include the date, or presumed date, of the Bill
of Lading.
The term "presumed" is used to protect the Seller because, at
the time of appropriation, he may not have yet sighted the B/L.
For this reason, the B/L date is not binding in the appropriation
and the Seller cannot be penalised if the actual B/L date is
different when it comes to presenting the documents.
@Gaftaworld
52
Content of Appropriation
However, the actual Bill of Lading date on the documents is
binding and if it proves that the Notice of Appropriation was
out of time, the Buyer can reject the documents. This can arise
when the actual B/L date is earlier than the presumed date

mentioned in the appropriation.
UNDER USUAL RESERVES “UUR” only protects the Seller
from genuine errors in transmission repeated in good faith.
@Gaftaworld
53
Case Studies
Case Study 1
GAFTA 100, Notice of Appropriation given by Seller, rejected
as defective by Buyer, Seller gives new notice for same vessel
but it is now 12 days after the B/L date. What should the Buyer
do?
Case Study 2
GAFTA 100, Seller presents all shipping documents within 10
days of B/L date, but gives no Appropriation. Valid?
Case Study 3
GAFTA 64, Delivery Period September 2018, pre advice of 10
days required. It is 26th September 2018. Can the Seller
declare default?
@Gaftaworld
54
Lunch

@Gaftaworld
Introduction to Charterparties
Nicholas Walser,
Partner
Gateley PLC
@Gaftaworld
Types of contract
There are different types of contract designed to be used for the
carriage of goods by sea
The most common examples are:
Contracts of Affreightment (COAs)
Charterparties
Bills of lading/sea waybills
@Gaftaworld
FOB

SELLER
BUYER
SHIP OWNER
SALE CONTRACT
CHARTERPARTY
@Gaftaworld
CIF
SELLER
BUYER
SHIP OWNER
SALE CONTRACT
Bill of lading
CHARTERPARTY
@Gaftaworld
Charterparties (1)
A contract between a shipowner commonly described in the
contract as “owner” and a “charterer”
Use of the whole (or part) of the ship
Three main types:
Bareboat (demise)
Time
Voyage

@Gaftaworld
Charterparties (2)
Bareboat/Demise – you hire the ship and nothing else:
No crew, no spares, no bunkers. Shipowner is giving you the
ship “bare”
Time/Voyage – essentially a contract for carriage services
@Gaftaworld
Time/voyage charterparties
Time charterparties: Use of the ship for a specified period of
time within trading limits
Voyage charterparties: Use of the ship for a specified voyage or
voyages
Which one you use will depend on your trading patterns:
Time: A trader wanting to lock in shipping costs for numerous
shipments
Voyage: A purchaser at the end of a FOB string, for example
Other commercial needs, e.g. flexibility makes time charters
more attractive, but at a cost
@Gaftaworld

Time charterparties - overview
Owner provides the ship, crew, spares, food, water etc. But no
bunkers. Ship under charterers’ orders against an indemnity
Charterer pays “hire” for the use of the ship and the provision
of its services, plus separately buys bunkers
Who bears the risk of delay? It depends on how the charter
period is defined
Simple time period – charterers bear the risk, because they pay
for the time used up to redelivery. They will pay damages for
late redelivery
“Trip time charter”. Hybrid – time defined by however long the
voyage takes. Owners at risk – floating warehouse
@Gaftaworld
Voyage charterparties - overview
Owner provides ship, crew and all fuel
Charterer pays “freight”
When is freight earned? Can you deduct from freight?
Who bears the risk of delay?
Normally the charterer:
Laytime and demurrage terms.
The voyage is not defined by time, BUT the Owners cannot
unlawfully deviate and normally must prosecute the voyage with
due despatch.
@Gaftaworld

Time versus voyage?
Owners
Charterers
Pro: Insulated from market rises
Con: Cannot take advantage of falls
Pro: Offers flexibility in use of the ship: Multiple
shipments/destinations/cargoes
Pro: Possible ability to mitigate delay by a change in ship
orders
Pro: Ability to “trade” the ship to make money
Time Charter
Pro: Guaranteed rate of income
Con: Cannot take advantage of market rises
Pro: Continuous operation of the ship reduces risks
Pro: Indemnity for vessel employment
Pro: Fewer delay risks
@Gaftaworld
Owner
Pro: Ship not tied up for long periods
Pro: Greater control over the ship
Pro: Mitigate risk of delay via demurrage
Pro: Ability to take advantage of market opportunities when
open at the end of the voyage – backhaul cargoes

Charterer
Pro: Short term commitment reduces market exposure
Pro: Less control over the ship
Pro: Not exposed to movements in bunker costs
Pro: Ability to lay off cost of delay (demurrage) under sale
contract
Time versus voyage?
Voyage Charter
@Gaftaworld
Bareboat charterparties
Shipowner provides only the ship
Charterer provides crew/bunkers/stores/maintenance
Charterer is responsible for liabilities that arise during the
charter period
Favoured by ship owning companies who want to invest in, but
do not want to operate, the ship
Advantage for the charterer: Essentially using a ship as if
owned, but do not have capital/credit tied up in it
@Gaftaworld
COAs
Strictly speaking not contracts for carriage of goods but a
contract for a series of voyages
Will normally specify a stated quantity by a stated number of

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