Crop Sale Agreement

A crop sale agreement (fashal kroy-bikroy chukti) is the forward contract between a farmer and a buyer (a rice miller, an aratdar, an exporter or a food processor) for the sale of a specified crop after harvest. In Bangladesh it is often paired with a dadon (advance) at planting time so the farmer can meet input costs, with the balance settled when the crop is delivered. The agreement is a contract for the sale of future goods within the meaning of Sections 4-6 of the Sale of Goods Act, 1930, and the main friction points are almost always the same: what quality and moisture content will be accepted, how the delivered weight is measured, what price index or fixed rate applies, and what happens if the crop fails from flood, drought or pest attack. Writing these down clearly protects the farmer from arbitrary rejection and protects the buyer from side-selling to a competing aratdar at a higher spot price.

Stamp & registrationA crop sale contract is usually executed on non-judicial stamp paper of nominal value (Tk. 300 is customary for a season-long contract) and does not require registration. If the buyer is paying a dadon (advance) it is prudent to record it in the same document — see the separate note on the Dadon / Advance to Farmer Agreement for the additional Bangladesh Bank guidance where a bank or MFI is the funder.

What this agreement typically contains

Farmer and buyer identity — name, address, NID, phone, trade licence (if buyer)
Crop, variety, and quality specification (moisture, grade, foreign matter tolerance)
Quantity to be delivered (with acceptable +/- tolerance)
Plot from which the crop will be delivered (mouza, dag no.)
Price — fixed per maund / quintal, or reference to a public procurement rate
Advance (dadon) paid at signing and how it will be adjusted at delivery
Place, mode and window of delivery
Who bears transport, weighing and loss-in-transit
Force-majeure treatment (flood, drought, cyclone, pest attack)
Payment terms for the balance after delivery
Dispute-resolution route and signatures of both parties + two witnesses

Create this agreement now

Frequently asked questions

If the crop fails, does the farmer have to repay the dadon?: It depends on what the contract says. Under the Contract Act, 1872 and the Sale of Goods Act, 1930, a contract for the sale of specific future goods that perish before delivery without either party's fault is generally frustrated, and the parties are restored to their pre-contract position — meaning the advance is normally refundable. But most dadon contracts in Bangladesh contain a specific clause saying the advance survives crop failure and must be repaid or carried forward to the next season. If your written agreement is silent, insist on adding a clear force-majeure clause covering flood, drought, cyclone and pest attack.
Can the buyer reject the crop for low quality after taking delivery?: Only if the quality standard is written into the agreement and the crop demonstrably fails it. Section 41 of the Sale of Goods Act, 1930 gives a buyer a reasonable opportunity to examine goods and reject non-conforming goods, but only against the agreed standard. That is why the quality specification in a crop sale contract — moisture content, grade, permissible foreign matter, permissible broken grain percentage for rice — has to be specific. A vague description like "good quality paddy" leaves the farmer exposed to arbitrary rejection at the mill gate.
Should a crop sale agreement be stamped and registered?: It should be executed on non-judicial stamp paper (Tk. 300 is customary in Bangladesh for a season-long contract) and signed by both parties in the presence of at least two witnesses. It does not need to be registered under the Registration Act, 1908 because it is not a transfer of interest in immovable property. If a dadon (cash advance) is involved, record the exact amount and the interest / adjustment terms in the same document.

Other contracts in this category

What this agreement typically contains

Farmer and buyer identity — name, address, NID, phone, trade licence (if buyer)

Crop, variety, and quality specification (moisture, grade, foreign matter tolerance)

Quantity to be delivered (with acceptable +/- tolerance)

Plot from which the crop will be delivered (mouza, dag no.)

Price — fixed per maund / quintal, or reference to a public procurement rate

Advance (dadon) paid at signing and how it will be adjusted at delivery

Place, mode and window of delivery

Who bears transport, weighing and loss-in-transit

Force-majeure treatment (flood, drought, cyclone, pest attack)

Payment terms for the balance after delivery

Dispute-resolution route and signatures of both parties + two witnesses

Frequently asked questions

If the crop fails, does the farmer have to repay the dadon?

It depends on what the contract says. Under the Contract Act, 1872 and the Sale of Goods Act, 1930, a contract for the sale of specific future goods that perish before delivery without either party's fault is generally frustrated, and the parties are restored to their pre-contract position — meaning the advance is normally refundable. But most dadon contracts in Bangladesh contain a specific clause saying the advance survives crop failure and must be repaid or carried forward to the next season. If your written agreement is silent, insist on adding a clear force-majeure clause covering flood, drought, cyclone and pest attack.

Can the buyer reject the crop for low quality after taking delivery?

Only if the quality standard is written into the agreement and the crop demonstrably fails it. Section 41 of the Sale of Goods Act, 1930 gives a buyer a reasonable opportunity to examine goods and reject non-conforming goods, but only against the agreed standard. That is why the quality specification in a crop sale contract — moisture content, grade, permissible foreign matter, permissible broken grain percentage for rice — has to be specific. A vague description like "good quality paddy" leaves the farmer exposed to arbitrary rejection at the mill gate.

Should a crop sale agreement be stamped and registered?

It should be executed on non-judicial stamp paper (Tk. 300 is customary in Bangladesh for a season-long contract) and signed by both parties in the presence of at least two witnesses. It does not need to be registered under the Registration Act, 1908 because it is not a transfer of interest in immovable property. If a dadon (cash advance) is involved, record the exact amount and the interest / adjustment terms in the same document.