Requirements for Valid and Enforceable Contracts of Sale for Future Delivery of Cotton, Grain, Stocks, and Other Items, Generally; Future Delivery Contracts Where Actual Delivery of Commodities Bought or Sold Not Contemplated Declared Unlawful

  1. Law
  2. Georgia Code
  3. Contracts
  4. Contracts for Future Delivery of Cotton, Grain, Etc
  5. Requirements for Valid and Enforceable Contracts of Sale for Future Delivery of Cotton, Grain, Stocks, and Other Items, Generally; Future Delivery Contracts Where Actual Delivery of Commodities Bought or Sold Not Contemplated Declared Unlawful

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  1. All contracts of sale for future delivery of cotton, grain, stocks, or other commodities (1) made in accordance with the rules of any board of trade, exchange, or similar institution, (2) actually executed on the floor of such board of trade, exchange, or similar institution and performed or discharged according to the rules thereof, and (3) placed with or through a regular member in good standing of a cotton exchange, grain exchange, board of trade, or similar institution organized under the laws of this state or any other state shall be valid and enforceable in the courts according to their terms, provided that contracts of sale for future delivery of cotton, in order to be valid and enforceable as provided in this Code section, must not only conform to the requirements of clauses (1), (2), and (3) of this subsection, but must also be made subject to the United States Cotton Futures Act, approved August 11, 1916, and any amendments thereto; provided, further, that if this clause should for any reason be held inoperative, then contracts for future delivery of cotton shall be valid and enforceable if they conform to the requirements of clauses (1), (2), and (3) of this subsection.
  2. All contracts as defined in Code Section 13-9-1, where it is not contemplated by a party to the contract that there shall be an actual delivery of the commodities sold or bought, shall be unlawful.

(Ga. L. 1929, p. 245, § 2; Code 1933, § 20-602; Ga. L. 1982, p. 3, § 13.)

Cross references.

- Securities regulation, Ch. 5, T. 10.

U.S. Code.

- The United States Cotton Futures Act, referred to in this Code section, is codified as 7 U.S.C. § 15b.

JUDICIAL DECISIONS

Although former Code 1933, § 20-602 (see O.C.G.A. § 13-9-2) was explicit, it must be read with Ga. L. 1962, p. 156, § 1 (see O.C.G.A. §§ 11-2-301 and11-2-308(a)). Cone Mills Corp. v. A.G. Estes, Inc., 377 F. Supp. 222 (N.D. Ga. 1974).

Contracts for future delivery of commodities where parties contemplate actual delivery are valid. Taunton v. Allenberg Cotton Co., 378 F. Supp. 34 (M.D. Ga. 1973).

Law does not affect validity of contracts for future delivery of goods where parties contemplate that there shall be actual delivery. R.N. Kelly Cotton Merchant, Inc. v. York, 379 F. Supp. 1075 (M.D. Ga. 1973), aff'd, 494 F.2d 41 (5th Cir. 1974).

Cited in Fenner & Beane v. Calhoun, 56 Ga. App. 823, 194 S.E. 51 (1937); Mitchell-Huntley Cotton Co. v. Lawson, 377 F. Supp. 661 (M.D. Ga. 1973); R.N. Kelly Cotton Merchant, Inc. v. York, 494 F.2d 41 (5th Cir. 1974); R.L. Kimsey Cotton Co. v. Ferguson, 233 Ga. 962, 214 S.E.2d 360 (1975); Cone Mills Corp. v. A.G. Estes, Inc., 399 F. Supp. 938 (N.D. Ga. 1975).

RESEARCH REFERENCES

Am. Jur. 2d.

- 17 Am. Jur. 2d, Contracts, §§ 30 et seq., 73. 68 Am. Jur. 2d, Sales, § 206.

ALR.

- Validity and construction of contract for sale of season's output, 1 A.L.R. 1392; 9 A.L.R. 276; 23 A.L.R. 574.

Nature and validity of "hedging" transactions on the commodity market, 20 A.L.R. 1422.

Validity of transactions in futures, 83 A.L.R. 522.


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