A cashew purchase contract should state the grade and specification, quantity and tolerance, packing and marking, price with a named Incoterm, shipment period, payment, inspection, documents, claims procedure, force majeure and how disputes are settled. Write the specification into the contract itself: standard import contracts such as the AFI form say the written contract is the entire agreement, so anything left out of it is hard to enforce.
Why does the contract matter so much in cashew?
Most cashew disputes are not about fraud. They are about a word that meant one thing to the seller and another to the buyer: “WW320” without a colour class, “November shipment” without saying whether that is loading or arrival, or “AFI quality” without saying which aflatoxin limit applies.
The AFI Standard Import Contract, widely used in the US trade, states that the written contract contains the entire agreement between the parties. Whatever form you use, the same rule holds in practice: if the specification is not in the contract, it is very hard to claim against.
This guide explains common commercial practice. It is not legal advice; have your contract reviewed by a lawyer familiar with the law that governs it.
Which 12 clauses should every contract include?
| # | Clause | What to write |
|---|---|---|
| 1 | Parties | Full legal names and addresses of buyer and seller; the seller’s factory address if different |
| 2 | Product and grade | For example “Vietnamese cashew kernels WW320, white wholes, 300–320 kernels per pound” |
| 3 | Specification | Reference standard plus your limits: moisture, defects, aflatoxin, microbiology |
| 4 | Quantity and tolerance | Cartons, net kg and any plus or minus tolerance |
| 5 | Packing and marking | Carton weight, vacuum or gas flush, label content, lot codes |
| 6 | Price and Incoterm | Price per kg or per lb, currency, Incoterm with named port and Incoterms edition |
| 7 | Shipment | Shipment period and port; whether the date refers to loading or arrival |
| 8 | Payment | Method, timing and which documents trigger payment |
| 9 | Inspection | Who inspects, where and when; whose report is final |
| 10 | Documents | Every document the buyer needs, with number of originals |
| 11 | Claims | Time limit, evidence and sampling method |
| 12 | Force majeure and disputes | Events covered, notice period, governing law and arbitration |
For the price clause, name the Incoterms edition — for example “FOB Ho Chi Minh City, Incoterms® 2020”. The difference between FOB and CIF is explained in FOB vs CIF explained.
How do you write the specification clause?
Start from the AFI cashew specification (September 2023 edition) and add the limits your market needs. The AFI specification sets moisture at 3–5%, free fatty acids at 1.5% max, peroxide value at 5 meq/kg max, no live infestation, E. coli non-detectable and Salmonella negative in 375 g. For aflatoxin it refers to the tolerance of the country where the goods are sold, so name that country — see aflatoxin limits in the EU and US.
- Grade and colour class — white wholes, scorched or dessert; first quality or second.
- Count — kernels per pound or per kg for the size.
- Defect tolerances — broken kernels, lower size, serious damage, as in the AFI tables.
- Chemical and microbiological limits — with the test method for each.
- Pre-shipment sample — whether an approved sample forms part of the specification.
The certificate of analysis should report against exactly these lines; see how to read a cashew certificate of analysis.
How should shipment and delay be worded?
Write the shipment period as a date range and say what it refers to — usually the on-board date on the bill of lading. The AFI contract defines “immediate shipment” as within 10 days of the contract date and “prompt shipment” as within 21 days; if a force majeure event delays shipment, the period is automatically extended by one month.
If you need the goods on the shelf by a set date, say so in commercial terms you can check: the latest on-board date, the port of loading and whether partial shipment or transhipment is allowed.
What should the claims clause say?
The AFI contract requires a buyer who intends to claim to immediately present an itemized written statement to the seller. Many buyers prefer a fixed time limit, measured from discharge or from delivery to the buyer’s warehouse, so both sides know where they stand.
- Time limit — for notice of a claim and for the supporting evidence.
- Sampling — how samples are drawn, sealed and split, and how many cartons are opened.
- Laboratory — an independent accredited laboratory, and whose result is final.
- Remedies — price allowance, re-sorting, replacement or rejection.
Which law and arbitration should apply?
Choose the governing law and the forum before there is a dispute. The AFI contract sends disputes to binding arbitration by the Association of Food Industries under its rules then in effect. Other trade bodies run their own arbitration schemes, and some buyers use general commercial arbitration. Whatever you choose, make sure it is named in the contract and that both sides can realistically take part.
Force majeure should list the events covered, the notice period and what happens if the event lasts beyond the extension — cancellation of the unshipped balance is common.
What should you check before signing?
For the full import process around the contract, see how to import cashew nuts from Vietnam.
If you use your own contract form, send it with your enquiry, so the specification and the document list can be checked against what will actually be shipped.
Should I use the AFI contract form?
It is widely used in the US trade and gives defined terms for shipment, insurance and arbitration, but it does not contain a cashew specification. If you use it, attach your specification to it.
What quantity tolerance is normal?
There is no single rule. State the quantity in cartons and net kg, and say whether any tolerance applies and at whose option.
Who should pay for pre-shipment inspection?
Agree it in the contract. Commonly the party that requires the inspection pays, unless the goods fail.
Ready to agree terms for your next shipment? Request a quotation →
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