The Soybean Meal Was Contaminated. The Test That Found It Was Not in the Contract.
Quote from chief_editor on June 4, 2026, 3:00 amContamination found by tests not specified in the contract creates disputes about whether the cargo meets specification. The test method is as important as the result.
A European animal feed manufacturer received a cargo of Argentine soybean meal. Standard testing at discharge — protein content, moisture, crude fiber, crude fat — confirmed specification compliance. The manufacturer's own quality lab then conducted an additional test for mycotoxins, specifically deoxynivalenol (DON), using a lateral flow immunoassay. The test returned a reading of 1,450 ppb DON — above the EU's guidance value of 900 ppb for soybean products intended for pigs and poultry.
The seller's position: the contract specified moisture, protein, fiber, and fat. It did not specify mycotoxin limits. The purchase contract contained no mycotoxin specification. The cargo met every specified parameter. The seller had delivered compliant goods.
The buyer's position: the cargo was not fit for its intended purpose — European animal feed — because it exceeded the EU's guidance limit for DON, making it unsaleable in their intended market.
Both parties were correct about different things. The cargo was contractually compliant. The cargo was commercially problematic for the buyer's specific intended use in a specific regulatory environment.
Specification Compliance Is Not Fitness for Purpose
In commercial law, goods that conform to the contract specification may nonetheless fail to meet the implied warranty of fitness for purpose — the requirement that goods be suitable for the buyer's particular intended use, when the buyer has made that purpose known to the seller. Whether the fitness for purpose warranty applies depends on the governing law of the contract and the facts of the specific case.
Under English law, which governs GAFTA contracts, the sale of goods implied warranty of fitness for purpose can apply when the buyer communicates a specific purpose to the seller and relies on the seller's skill and judgment to supply goods meeting that purpose. If the buyer is a large manufacturer who clearly indicated they were buying soybean meal for European pig and poultry feed production, and the seller knew this, the fitness for purpose argument has some footing.
However, the defense is limited by a principle that also applies: the buyer cannot reasonably rely on the seller's skill and judgment for a specific regulatory requirement that the buyer did not include in the specification. If the buyer failed to specify a mycotoxin limit despite knowing their regulatory environment requires one, the argument that the seller should have supplied compliant goods without being told what the regulatory requirement was is weakened.
Industry estimates for mycotoxin contamination in South American soybean and corn crops suggest that DON levels in Argentine soybean meal vary significantly by crop year and region, with some years producing substantially higher average contamination levels than others. European buyers who have been sourcing South American soybean meal for years typically include EU-maximum or tighter mycotoxin specifications in their contracts — because they have learned, through earlier experiences, that relying on the specification's other parameters without addressing mycotoxins leaves a gap that the right crop year fills with a problem.
The Regulatory Gap in Standard Contract Forms
GAFTA contract forms for soybean meal — GAFTA 100 and related forms — specify a standard set of quality parameters developed before EU mycotoxin regulations became as specific and enforceable as they are now. Standard forms do not include mycotoxin specifications because they are negotiated bilaterally rather than being incorporated into the standard.
The gap between standard contract forms and current regulatory requirements in importing jurisdictions is a recurring source of specification disputes for agricultural commodity traders. As food and feed safety regulations have become more specific — more parameters, lower limits, more rigorous testing requirements — the standard contract forms that have not been updated to reflect these changes create compliance gaps that appear at discharge when the buyer's regulatory environment imposes requirements the contract does not address.
Traders who source agricultural commodities for sale into regulated markets — the EU, Japan, South Korea, or other jurisdictions with detailed food and feed safety frameworks — need to build the destination regulatory requirements into the purchase specification, not assume that standard contract forms cover them. The standard forms were not written to protect a specific buyer's regulatory compliance. They were written to define a commonly traded specification. These are different things.
Contamination found by tests not specified in the contract creates disputes about whether the cargo meets specification. The test method is as important as the result.
A European animal feed manufacturer received a cargo of Argentine soybean meal. Standard testing at discharge — protein content, moisture, crude fiber, crude fat — confirmed specification compliance. The manufacturer's own quality lab then conducted an additional test for mycotoxins, specifically deoxynivalenol (DON), using a lateral flow immunoassay. The test returned a reading of 1,450 ppb DON — above the EU's guidance value of 900 ppb for soybean products intended for pigs and poultry.
The seller's position: the contract specified moisture, protein, fiber, and fat. It did not specify mycotoxin limits. The purchase contract contained no mycotoxin specification. The cargo met every specified parameter. The seller had delivered compliant goods.
The buyer's position: the cargo was not fit for its intended purpose — European animal feed — because it exceeded the EU's guidance limit for DON, making it unsaleable in their intended market.
Both parties were correct about different things. The cargo was contractually compliant. The cargo was commercially problematic for the buyer's specific intended use in a specific regulatory environment.
Specification Compliance Is Not Fitness for Purpose
In commercial law, goods that conform to the contract specification may nonetheless fail to meet the implied warranty of fitness for purpose — the requirement that goods be suitable for the buyer's particular intended use, when the buyer has made that purpose known to the seller. Whether the fitness for purpose warranty applies depends on the governing law of the contract and the facts of the specific case.
Under English law, which governs GAFTA contracts, the sale of goods implied warranty of fitness for purpose can apply when the buyer communicates a specific purpose to the seller and relies on the seller's skill and judgment to supply goods meeting that purpose. If the buyer is a large manufacturer who clearly indicated they were buying soybean meal for European pig and poultry feed production, and the seller knew this, the fitness for purpose argument has some footing.
However, the defense is limited by a principle that also applies: the buyer cannot reasonably rely on the seller's skill and judgment for a specific regulatory requirement that the buyer did not include in the specification. If the buyer failed to specify a mycotoxin limit despite knowing their regulatory environment requires one, the argument that the seller should have supplied compliant goods without being told what the regulatory requirement was is weakened.
Industry estimates for mycotoxin contamination in South American soybean and corn crops suggest that DON levels in Argentine soybean meal vary significantly by crop year and region, with some years producing substantially higher average contamination levels than others. European buyers who have been sourcing South American soybean meal for years typically include EU-maximum or tighter mycotoxin specifications in their contracts — because they have learned, through earlier experiences, that relying on the specification's other parameters without addressing mycotoxins leaves a gap that the right crop year fills with a problem.
The Regulatory Gap in Standard Contract Forms
GAFTA contract forms for soybean meal — GAFTA 100 and related forms — specify a standard set of quality parameters developed before EU mycotoxin regulations became as specific and enforceable as they are now. Standard forms do not include mycotoxin specifications because they are negotiated bilaterally rather than being incorporated into the standard.
The gap between standard contract forms and current regulatory requirements in importing jurisdictions is a recurring source of specification disputes for agricultural commodity traders. As food and feed safety regulations have become more specific — more parameters, lower limits, more rigorous testing requirements — the standard contract forms that have not been updated to reflect these changes create compliance gaps that appear at discharge when the buyer's regulatory environment imposes requirements the contract does not address.
Traders who source agricultural commodities for sale into regulated markets — the EU, Japan, South Korea, or other jurisdictions with detailed food and feed safety frameworks — need to build the destination regulatory requirements into the purchase specification, not assume that standard contract forms cover them. The standard forms were not written to protect a specific buyer's regulatory compliance. They were written to define a commonly traded specification. These are different things.