Rule 1 – Responsibility
CLAUSE 1: Primary Buyers and Mill Service Agents, whether members or not, if they trade under the Association rules or with members of the Association, shall be subject to these Rules, Arbitrations and Appeals.
CLAUSE 2: Agreements for a Mill Service Agent or Primary Buyer to represent a mill, merchant shipper, or other principal should be in writing and should state the term of the agreement, the basic responsibilities and the commission or fee to be paid for those services. If no written agreement exists, it shall be understood that verbal agreements are, for the purposes of these Rules, for the current season only. At all times the Mill Service Agent/Primary Buyer must act in the best interests of the principal he represents.
CLAUSE 3: Mill Service Agents and Primary Buyers shall be held responsible for their mistakes. When trading, they shall keep both parties to the contract duly informed of all conditions and terms affecting the transaction and they shall be responsible for any misrepresentations which they shall make to either buyer or seller. All telegraphic or telephone sales shall be confirmed in writing as promptly as possible.
CLAUSE 4: Bids and offers made through Mill Service Agents, unless otherwise specified, shall only be valid for reply by five o’clock p.m., local time, of the same day.
CLAUSE 5: Mill Service Agents’ and Primary Buyers’ contracts should have printed on the back thereof the Trading rules of the Federated Association governing the area in which they are doing business.
Rule 2 – Commissions
CLAUSE 1: Mill Service Agents shall be allowed to charge a commission:
(a) On all sales they negotiate.
(b) Unless otherwise specified, if within five days prior to the date of sale the Mill Service Agent shall have displayed to the buyer, the actual samples of the cotton that is subsequently sold to the buyer.
(c) If they initiate a trade between buyers and sellers, even though the final consummation of the transaction is negotiated directly between the contracting parties, but only if the sale is made within five days of such initiative advice.
(d) On the bales that are accepted on sales sold subject to approval of the cotton.
(e) On follow-up business, done within five days of the original trade, even though negotiated directly between the seller and the buyer.
CLAUSE 2: Commissions shall not be due if the transaction is not fulfilled on account of a mistake of the Mill Service Agent or on default of the party not represented by the Mill Service Agent.
CLAUSE 3: If a trade is canceled between the original buyer and seller for any reason whatsoever, with or without the assistance of the original Mill Service Agent, the Mill Service Agent shall be entitled to full commission from the party he represents.
CLAUSE 4: Unless otherwise specified in their agreement with their principals, Mill Service Agents shall be entitled to collect commissions promptly upon delivery of the cotton against the sale negotiated. Commissions on partial deliveries may be charged monthly.
CLAUSE 5: Primary Buyers shall be governed by Rule 2 and the above clauses by substituting the word “purchase” where “sale” is used, the word “seller” where “buyer” is used and “Primary Buyer” where “Mill Service Agent” is used.
Rule 3 – Samples
CLAUSE 1: Samples shall be representative of the bale and shall be shown with the lower side uppermost
CLAUSE 2: Buyers shall have the right to demand that redrawn samples be sent to them straight from the compress, warehouse or yard; the cost of resampling to be borne by the buyer. The original sale samples shall be sealed and held by the Mill Service Agent until arrival of the redrawn samples. If the redrawn samples do not show up equal to the original samples, the seller shall make good any loss to the buyer.
CLAUSE 3: Where cotton is sold on actual samples, the Mill Service Agent shall, if the buyer wishes, issue resampling instructions as soon as possible, but within 24 hours from the time of sale, and after receipt of the redrawn samples, the shipper shall be allowed 48 hours in which to class up the cotton. In case, however, a buyer is in urgent need of the cotton he shall be allowed to ship it on the original samples; but if it is found, upon arrival of resamples, which shall be drawn by a disinterested party before shipment, that the cotton is not equal to the original samples, the seller shall be responsible to the buyer for the difference in quality.
Trading Practices – Rule 1
CLAUSE 1: This Association recognizes that different trading practices and customs have been established in various parts of the country which may require detailed rules peculiar to that area. The Federated Associations are expected to establish the necessary rules for each Association’s respective area. No rule will be considered valid if it conflicts with these general rules of this Association.