Contract library
The contract library holds your company's standard wording and pricing rules: clauses, templates made of clauses, and price formulas. Each goes through an approval workflow, so only approved wording and formulas reach contracts.
1. The approval workflow of library records
Contract Clause, Contract Template, Price Formula and Discount Matrix share the same four-step workflow:
| Step | Action | Who |
|---|---|---|
| Draft | Submit for Review | Contracts Executive (clauses, templates); Trader (price formulas, discount matrices) |
| In Review | Approve (not the requester) or Return for Changes | Legal Manager (clauses, templates); Trade Risk Manager (price formulas, discount matrices) |
| Approved | Revise (back to Draft) or Retire | Author or approver; approver retires |
| Retired | – | No longer offered |
2. Contract clauses
Contracts › Library › Contract Clause.
- New. Title (for example Quality - Coal GCV), Category (Quality, Price, Quantity, Delivery, Laytime, Payment, Documents, Inspection, Insurance, Title and Risk, Force Majeure, Sanctions, Governing Law, Arbitration, Confidentiality…).
- Tick Standard Wording for your company's standard text.
- Optionally narrow it to a Commodity, Incoterm, Jurisdiction and Language.
Clause Text: the wording. Put contract values in double braces, for example:
The Seller shall deliver {{ quantity }} metric tonnes (+/- {{ tolerance_pct }}% at the Buyer's option) at USD {{ base_price }} per metric tonne, {{ incoterm }} {{ load_port }}.Any field of the Trade Contract can be used (
quantity,base_price,currency,incoterm,load_port,laycan_from,laycan_to,load_rate,demurrage_rate,despatch_rate,payment_terms,governing_law,arbitration…). The port shows its name, money and dates their formatted value.- Variables Used: a note of the variables, for reviewers.
- Save and Submit for Review.
A clause that differs from your standard can be marked on the contract as a deviation, which then needs Legal's approval before the contract is finalised.
3. Contract templates
Contracts › Library › Contract Template.
- New. Template Name (for example Bulk Coal FOB), For (Purchase and Sale, Purchase, Sale), optionally Commodity, Incoterm, Governing Law, Arbitration.
- Clauses: add the clauses in the order they appear in the contract.
- Save and Submit for Review.
On a new contract, choosing the template copies its clauses with the contract's values filled in (see Trade contracts). A contract type can name a default template.
4. Price formulas
Trading › Pricing & Quality › Price Formula. A price formula turns a surveyor's quality result into the price paid.
| Field | Meaning | Example (coal) |
|---|---|---|
| Name | How contracts refer to it | Coal GCV pro rata, cap 4,300 |
| Quality Parameter | The parameter from the analysis certificate | GCV (ARB) |
| Contract Basis Value | The value the base price is for | 4,200 |
| Adjusted Price = | Arithmetic on base_price, actual and basis |
base_price * actual / basis |
| Round Adjusted Price To | Decimals of the adjusted price (the price is rounded before it is multiplied by the quantity, as invoices do) | 2 |
| No Bonus Above | Results above this pay as this value | 4,300 |
| No Further Penalty Below | Results below this pay as this value | – |
| Reject Below / Reject Above | Beyond these the cargo may be rejected | 4,000 |
| Warn Within % of a Rejection Limit | Results this close to a limit are flagged Close to Limit | 2% |
The formula accepts numbers, + - * / ( ), min, max, abs, round and the three variables; anything else is refused when the formula is used. Other examples:
- Iron ore, 0.5 USD per 1% Fe:
base_price + (actual - basis) * 0.5 - A premium capped at 2 USD:
base_price + min(2, (actual - basis) * 0.1)
Example: base price 51.72, actual GCV 4,036, basis 4,200 → 51.72 × 4,036 / 4,200 = 49.70 per MT. With a cap of 4,300, an actual of 4,350 pays as 4,300.
The result's status is Within Limits, Close to Limit or Rejectable. A rejectable result freezes the settlement until the buyer's waiver is recorded (see Commercial settlement).
5. Discount matrices
Trading › Pricing & Quality › Discount Matrix: early-payment discounts by how many days early a payment is made.
- Name (for example Supplier early payment (USD)), Currency, Day Count (Actual/360 or Actual/365).
- Bands: Paid Days Early From, To, Discount Rate % p.a., for example 1-30 days 6.00%, 31-60 days 6.75%, 61-120 days 7.50%. Bands may not overlap.
- Approve it. A commercial settlement uses it when Pay Early On is set.