Following the adoption of the Decision on Determining Agricultural Products in the Sectors in which the Conclusion of Written Contracts between Agricultural Producers and Processors or Purchasers is Mandatory, which introduced the obligation to conclude written contracts for the trade of certain agricultural products, the Rulebook on the Essential Elements of Contracts between Agricultural Producers and Processors or Purchasers of Agricultural Products (the “Rulebook“) has now been adopted.
The Rulebook provides detailed requirements regarding the mandatory content of such contracts, with the aim of enhancing legal certainty, transparency, and the consistent application of the regulatory framework in practice.
The Rulebook prescribes that, at a minimum, contracts must include: identification details of the contracting parties (including the producer’s registered agricultural holding number); the subject matter of the contract; the quantity of products and delivery schedule; the purchase price and the method of its determination; payment terms and payment method; the place and manner of delivery; liability for the quantity and quality of the products; force majeure provisions; the duration of the contract; and the manner of concluding the contract.
Price Determination – The Rulebook distinguishes between:
- Fixed prices, determined as a monetary amount per unit of measure;
- Variable prices, determined by means of a predefined formula based on objective, verifiable and publicly available criteria (such as market indicators, product quality or delivery volumes); and
- Combined prices, consisting of both fixed and variable components.
The pricing methodology must be drafted in a manner that enables both contracting parties to determine the final purchase price at any time, without the need for any additional agreement.
Delivery and Quality Control
The Rulebook requires that each delivery be evidenced by a delivery record containing information on the quantity and quality of the products, as well as the date and time of delivery, duly signed by the authorized representatives of both contracting parties.
The quantity and quality of the delivered products must be verified upon delivery in the presence of authorized representatives of both the producer and the purchaser or processor.
Payment and Contractual Transparency
In addition to regulating payment deadlines and methods, contracts may provide for payment verification and reconciliation mechanisms, as well as specific provisions governing variable pricing and price reductions, thereby further enhancing transparency in contractual relations.
Force Majeure and Contract Duration
The Rulebook regulates the consequences of force majeure, including the obligation to promptly notify the other contracting party, the possibility of extending performance deadlines, and the right to terminate the contract where performance has become permanently impossible.
It further provides that contracts may be concluded either for a fixed term of no less than six months or for an indefinite period, subject to agreed termination provisions.
Electronic Execution of Contracts
The Rulebook expressly recognizes the possibility of concluding contracts electronically, provided that the parties can be reliably identified, their mutual consent can be evidenced, and the contract is executed using an electronic signature.
For companies engaged in the purchase or processing of agricultural products, including those operating in the honey and apiculture sector, the Rulebook makes it clear that compliance requires more than merely executing a written contract. Existing contract templates should be reviewed and aligned with the mandatory contractual elements now expressly prescribed by the Rulebook.
For additional information or consultations, the Tasić & Partners team is at your disposal.