Neutral General Terms and Conditions to facilitate efficient contracting
Negotiating General Terms & Conditions (GTCs) can sometimes be even more time consuming than concluding the actual commercial terms of a metals contract. Despite having agreed on price, specifications and delivery details, it regularly happens that contracting counterparties cannot agree upon whose GTCs to use. In the worst case, this can become a deal breaker. Alternatively, the contracting parties sometimes revert to the so called “Battle of the Forms”.
Update: March 30, 2022
A Battle of the Forms arises when two businesses are negotiating the terms of a contract and each party wants to contract on the basis of its own GTCs. So Company A offers to buy goods from company B on its own GTCs and B accepts the offer based on its own GTCs. Many lawyers in English law assume that the last GTC document, sent prior to fulfilling the contract, is the contract. This is commonly known as the “Last shot rule”. However, in international law it is not that easy. Some countries, for example the Netherlands, know the “First shot rule” while in other countries like Germany the “Knock Out Rule” applies. This can lead to a significant uncertainty when it comes to a dispute as it is not entirely clear whose GTCs apply.
For this reason, Metalshub has together with leading industry legal advisors created “Neutral General Terms & Conditions” that are balanced and fair for both, Sellers and Buyers. These GTCs are intended to create an industry standard similar to SCOTA (Standard Coal Trading Agreement) in the coal industry. The Neutral GTCs will facilitate efficient trading of metals and help to avoid lengthy GTC negotiations. This will help all parties trading on Metalshub to free up time and to focus on the important stuff: The metal trade itself!
The in-house legal departments of leading trading companies and steel mills have already approved the Metalshub Neutral GTCs. At present, 50% of transactions on Metalshub have been executed on the basis of the Neutral GTCs. How about your company? If you would like to receive the Neutral GTCs, please send us an email to email@example.com!
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