Canada Grain Regulations

29.3 (1) Any contract between a producer and a licensee for the purchase of grain within a delivery period must include a provision stating that, in the event that delivery of the kind and grade of grain indicated in the contract is not accepted by the licensee during the delivery period, a penalty is to be paid by the licensee to the producer.

(2) The contract must also include provisions stating that the penalty

• (a) is agreed on by the producer and the licensee in the contract;

• (b) applies to the remaining undelivered portion of grain that was contracted for but that was not accepted by the licensee during the delivery period; and

• (c) is payable either at the time that the delivery of grain is completed by the producer or on another day otherwise agreed on by the producer and the licensee.

(3) If the penalty agreed on by the producer and the licensee is based on a daily amount, the penalty is payable for each day during the period beginning on the first day after the day on which the delivery period expires and ending on the day on which the total amount of grain specified in the contract is accepted and received by the licensee, or on another day otherwise agreed on by the producer and the licensee.