View Full Version : Material Commodity Agreements

02-14-2014, 08:04 PM

I am in need of assistance on general language for assembling a Materials Commoidty Agreement. I come out of the automotive industry and had resources available to insulate us from commodity volitility. In my current role, we do not have resources available in this discipline.

Can anyone recommend boilerplate language, items to consider, or commercial mechanisms for commercial language to consider for drafting:

For example:

Baseline Pricing
Index Used
Hedging Pricing Position
Fixed Lock (How long is lock good for)

Langauge such as

5% no pay band
Anything above or aver triggers band.
50/50 Split between Seller and Buyer

For example, if the index is 100 and it goes to 107 based upon a 1 year average agreed upon, both Seller and Buyer would assume the delta of 1% each for risk for that commodity.

I would be extremely appreciative of any assistance this forum can provide.