THE STANDARDIZATION OF CONTRACTS BASED ON BEST PRACTICES IN THE EGYPTIAN COTTON TRADE

The goal of this paper is to identify best practices in the Egyptian cotton trade in order to evaluate whether or not a standardized contract is attainable. In order to uncover the best practicesin the cotton trade, key players worldwide, who had some link to the Egyptian cotton trade, weresurveyed and interviewed. The key players include farmers or the producers of raw cotton; weavers; traders or the sellers of tradable cotton; bankers or the lenders to the participants in thecotton trade; shippers or the actual sellers and consignors of the shipped cotton; freight brokers orintermediaries between the shippers and the carriers and the various cotton trade associations. At the time of this writing, there is no standard contract for the international cotton trade.Traders often rely on the trading rules of a local cotton association to guide them in contract formation; however, most traders do not abide by a standard set of trading rules, which oftencreates disputes among trading parties. These disputes include but are not limited to cotton quality, strength, or grade; weight discrepancies; shipping errors; and payment. Prior to drafting a contract, it is necessary to address each aspect of the production and saleof cotton from the farmer to the exporter. The research will guide the lay reader through thisprocess. One can expect to obtain a step-by-step guide on the Egyptian Cotton Trade from the planting of the cotton seed, to harvesting and ginning, and finally to exporting. By following thesesteps, we will have a better idea of whether or not a standardized contract will suffice the trade or whether a recommended contract based on best practices is preferred. Based on our extensive research, it has been determined that the intricacies of the tradelend to drafting a recommended contract rather than a standardized contract for the Egyptian Cotton Trade (EICC- Egyptian International Cotton Contract). The recommended contract is based on best practices in the international cotton trade, which can act as a model for other countries aswell. By utilizing this recommended document, trading parties will avoid many of the recurring issues faced in the international sale of cotton.