S.C. Code Regs. § § 5-581.03

Current through Register Vol. 48, No. 11, November 22, 2024

Section 5-581.03 - Contracts

1. All purchases of grain from producers, other than grain paid for at time of delivery by U.S. currency, or cashier's check, shall be supported by cancelled check(s) or by a written contract(s) or by any other written documentation required by the Commissioner of Agriculture.

2. The licensed grain dealer shall for all grain received or delivered to him by the producer for purchase that is not paid for upon delivery, shall issue a written acknowledgement to the seller stating the terms of purchase. No grain that is to be purchased by the dealer from the producer shall remain in the custody, care, or possession of the dealer without a written explanation of the intended disposition of said grain. Written contracts may be negotiated prior to, or acknowledgement written upon the dealer receiving said grain.

3. Contracts to be used by licensed grain dealers shall contain the following:

(A) Each contract shall be numbered;

(B) The name, address, and telephone number of the producer-seller and licensed grain dealer;

(C) The dealer's license number as assigned by the South Carolina Department of Agriculture and according to the Dealers and Handlers of Agricultural Products Law;

(D) The date the contract is issued and when to be completed;

(E) A specified amount of grain to be purchased;

(F) A schedule of the dealer's factors, discounts, and premiums;

(G) A statement printed in bold letters: "NOT STORAGE";

(H) A statement in bold print letters informing the seller that the seller is relinquishing all rights in the grain and title of such grain has passed to the dealer;

(I) The signatures of both the seller and dealer.

4. The licensed grain dealer shall assure that:

(A) A copy of the contract is given to the seller.

(B) A copy is held and filed in numerical order by the dealer for inspection.

5. The licensed grain dealer shall account for all contracts. Void contracts shall be placed in his file for inspection.

6. The licensed grain dealer shall before using any contract, file with the Commissioner of Agriculture a sample of the said contract to be used for approval.

7. [Deleted]

8. Any licensed dealer who wishes to change or alter the contents of his contract must notify in writing the Commissioner of Agriculture. A sample of the contract with requested changes must be on file with the South Carolina Department of Agriculture. The Commissioner of Agriculture may approve or disapprove the requested changes.

9. The Commissioner of Agriculture may require any additional information from a licensed grain dealer that is deemed necessary to--

(A) Assure sound business practices.

(B) Protect the seller.

10. A licensed grain dealer who purchases commodities by deferred-price or delayed-payment contracts, or any similar credit-type sale agreements, shall at all times maintain grain, rights in grain, proceeds from the sale of grain, or a combination thereof totaling a minimum of ninety percent of the current market value of the dealer's obligation for commodities purchased by such agreement. Such amount shall be evidenced or represented by one or more of the following:

(A) Sufficient grain actually held by the dealer in his storage facilities.

(B) Sufficient rights in grain as evidenced by warehouse receipts issued by a state or federally licensed warehouse, bills of lading or other approved documentation.

(C) Sufficient proceeds from the sale of grain as evidenced by cash on hand or cash held on account by state or federally licensed financial institutions, or equivalent security approved by Department.

This requirement shall not apply to contracts between a grain dealer and seller who executes an affidavit within the contract forfeiting title, ownership of the commodity and all rights under the Dealer and Handler Guaranty Fund as provided for in Section 39-22-200.

S.C. Code Regs. § 5-581.03

Added by State Register Volume 6, eff April 23, 1982. Amended by State Register Volume 7, Issue No. 6, eff June 24, 1983; State Register Volume 16, Issue No. 6, eff June 26, 1992; State Register Volume 18, Issue No. 5, eff May 27, 1994.