Contracts Make It Safer To Explore New Markets

Across the Prairies, agriculture businesses of all kinds — seed suppliers, equipment dealers, crop input retailers, ag-tech firms and others — are navigating fast-changing markets.

Trade rules shift, border delays pop up and long-standing supply routes suddenly get complicated.

For many businesses, exploring new markets isn't a big strategic overhaul — it's a practical response to keep product moving and customers supplied.

Whether you're selling across the border or sourcing products from overseas, one thing matters more than people expect: a clear, practical contract.

Why contracts matter

Working with new distributors, buyers or suppliers means operating under new assumptions, even if the relationship feels friendly. A quick agreement over email might seem fine — until a shipment gets stuck, a fee increases or a partner doesn't deliver.

Clear contracts protect both sides by spelling out responsibilities and giving you a plan when things don't go as expected.

Tariffs and border costs

Tariffs and import fees can change quickly. Seed shipments can get new inspection requirements. Crop inputs may face additional documentation. Equipment parts can suddenly be hit with new duties.

If your contract doesn't say who absorbs those extra charges, the cost often lands on you.

For example, a Prairie seed company selling to the northern United States includes a clause allowing prices to adjust if new phytosanitary rules raise costs. Both sides know the ground rules before the first shipment leaves.

Currency fluctuations

Selling into the U.S., South America or Europe means dealing with currencies that can swing from one month to the next. A profitable order can turn unprofitable by the time it's delivered.

Simple contract tools help manage this:

• Price in Canadian or U.S. dollars.
• Use exchange-rate adjustment clauses.
• Break payments into stages so you're not waiting months for final payment.

For example, a fertilizer retailer selling product into Montana prices in U.S. dollars and reviews pricing every 60 days for unshipped orders, keeping the margin predictable.

Supply chain delays

Delays have become common, whether it be crop inputs waiting for customs clearance, equipment parts stuck overseas or seed shipments slowed by inspections. Contracts can help you plan for this uncertainty.

Helpful clauses include:

• Delivery timelines that reflect real-world risks.
• Rules for how to handle supplier delays.
• Permission to substitute comparable products if supply tightens.
• Force majeure protection for events outside your control

For example, a crop-protection wholesaler reliant on imported ingredients includes a clause allowing for equivalent formulations if the original shipment is delayed. Farmers stay supplied, and the wholesaler stays compliant.

Local partners

Many ag businesses enter new markets through distributors or sales agents. A good partner is invaluable, but only if expectations are clear.

Strong agreements should address:

• Sales targets or territory expectations.
• Marketing and service responsibilities.
• Local licensing or regulatory duties.
• Minimum inventory levels.
• How confidential information is handled.
• Termination rights that allow you to pivot if needed.

For example, a Canadian ag-tech firm selling monitoring sensors requires its distributor to keep spare units in stock for harvest-season emergencies. That protects customer service and the brand.

Protect your know-how

Not every business relies on patents or trademarks, but every ag business has valuable know-how, such as formulations, breeding data, algorithms, supplier lists or product specifications.

Contracts can protect all of that by using:

• Confidentiality clauses.
• Limits on sharing technical information.
• Restrictions on reverse engineering.
• Controls on subcontracting.

These protections are especially useful in places where enforcing IP rights can be slow.

Plan for disputes

The best time to choose how disputes will be handled is before they arise. Decide on:

• Which country's law applies.
• Whether disputes go to court or arbitration.

Many ag businesses choose arbitration with neutral governing law for easier enforcement internationally.

Final thoughts

Entering a new market can be an opportunity, but only if the contract behind the relationship is solid.

Whether you're moving seed, chemical, equipment parts or ag-tech solutions, a clear agreement helps prevent surprises and protects your bottom line.

Good legal planning doesn't slow you down. It keeps you nimble, competitive and ready for whatever the market throws your way.

Originally published by Western Producer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.