5 - International Commodity Sales

Summary

To satisfy an industrialising and industrialised Britain, huge quantities of ‘soft’ commodities - grain, cotton, coffee, cocoa, sugar and palm oil – were grown, harvested and transported from North America, the steppes of Russia, Asia, Africa and the southern hemisphere for sale on the commodity markets of London and Liverpool. Sales of commodities in the first part of the nineteenth century were by dealings on physical markets and by auction. Trade associations like the London Corn Trade Association formed from the mid-nineteenth century had as a major aim the formulation of standard form contracts to govern the international sale of these commodities. Sale in this way need not be on physical markets or by auction, but could be at a distance. These standard form contracts modified the default rules of sales law. They are the precursors of contracts used world-wide today. Although governed by English law, they were adopted internationally. Traders in other countries had an input into their formulation. In drawing them up trade association members took the lead, with lawyers ‘on tap, not on top’. Disputes were settled by arbitration provided in the contract, and relatively few reached the courts. Untoward court decisions were remedied by redrafting the contracts.