Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Commodities definition

What does Commodities mean? In legal practice, commodities describes fungible raw materials and primary products—such as crude oil, natural gas and power, metals (ferrous and non‑ferrous) and agricultural products—standardised for physical and derivatives trading. The term is descriptive and used across multiple legal contexts, rather than having a single statutory definition. However, in financial regulation, commodity derivatives are defined and regulated under retained UK MiFID and UK EMIR, and in Ireland under EU MiFID II and EMIR, with related rules under UK MAR/EU MAR for market abuse in commodity and related derivatives markets. Key legal features include standard specifications of quality/grade, delivery terms (often via...

Commodities sales and carriage: CIF/FOB contracts, common disputes on quality, documents, timing, force majeure and sanctions, charterparty links, and trade arbitration bodies

Published by a LexisNexis Arbitration expert

Practice notes

An introduction to contracts for the sale and purchase of commodities

Contracts for the sale and purchase of commodities sit at the centre of international trade. A single deal for a particular commodity will typically involve several additional contracts or commercial arrangements, including but not limited to:

a contract for the transport of the commodity by sea and, possibly, by road and/or rail
a contract of insurance
the execution of a bill or exchange, or the opening of a letter of credit or other documentary credit

Many, though not all, disputes stemming from contracts for the sale of commodities and related agreements are resolved by arbitration. As outlined below, numerous bodies that create standard form contracts or deliver services for specific trade sectors also offer arbitration facilities. For further details on commodities arbitration, see Practice Note: Commodities arbitration—trade associations and arbitration rules.

The focus of this Practice Note is on contracts for the sale of commodities and on contracts for the carriage of commodities by sea. It considers:

the division of commodities into ‘hard’ and ‘soft’
types of contracts typically used...

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Paul Toms

Quadrant Chambers

Paul is an experienced barrister specialising in commercial and international trade disputes.

Web page updated on 21/05/2026

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