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G idelines for Metals Transactions

These Guidelines are intended as a reference to assist

members in carrying out their business obligations in a

manner consistent with accepted industry practices. While

the Guidelines are not obligatory, it is suggested that

potential problems and misunderstandings may often be

avoided by following these recommended procedures, in

conjunction with ISRI’s scrap descriptions.

At times, the respective parties to a transaction may be

unaware of the differences in trading practices of the other

party. This diversity of interpretation often leads to misun-

derstandings, disputes, and in some instances expensive

lawsuits. It is with the objective of providing members the

means of avoiding such friction that ISRI has published

these Guidelines, which are based on those practices most

common and current in the industry.

On those points where it is impractical to provide recom-

mendations, it is advised that the points be mutually agreed

upon by the parties involved.

Part I: Guidelines for Contracts

A contract is an agreement between two or more parties to

perform a legally enforceable act.

Therefore, all contracts should be in writing and set forth in


terms. Before signing a contract, one should care-

fully read and understand all terms of it. No discrepancies

or ambiguities should exist at the time the contract is exe-

cuted. If you receive a contract with terms that are objec-

tionable, you should immediately notify the other party in

writing of your objections. An attorney should be consulted

when legal advice is needed.

It should be kept in mind that if a dispute arises under a

contract, and a court is called in to interpret its terms,

certain general rules will be applied. First, contracts will be

construed as a “whole,” and specific clauses will be subor-

dinated to the contract’s general intent. Second, the courts

will construe words according to their “ordinary” meaning

unless it is clearly shown that they were meant to be used

in a technical sense. Also, where provisions appear to be

inconsistent, the courts will determine whether some of the

provisions are printed (indicating a form contract), as com-

pared to others which are written or typed. The latter kinds

of provisions will prevail.

It should be remembered that where you and a Buyer (or

Seller) have reached verbal agreement on a transaction,

your failure to sign and return a contract which is sent

to you in confirmation of that verbal agreement may not

relieve you of the obligations of the terms and conditions

enumerated in that contract.

These Guidelines were developed to cover routine trans-


It is essential that any unusual arrangements must

be completely spelled out in a contract. With these factors in

mind, the following list of items is enumerated as a



for you to follow, either in the construction of a contract,

or for the review of another party’s contract proposal. We

cannot overemphasize the need for accuracy and specific-


Checklist Items


I. Parties to Agreement:

Indicate full name and address of Buyer and Seller. Include

name of individual person or persons involved. Buyer’s and

Seller’s signatures are fundamental.

II. Date of Contract:

(a) Give date the initial agreement was reached

(b) Give Contract Number.

Ill. Description of Material:

Use NF code names or clearly describe what is being traded.

Any allowable quality variation to be so stated. Ex: “X per-

cent moisture allowed” or “Minimum CU content to be X

percent” or “X percent painted material allowed.”

IV. Quantity:

State exact quantity expected and indicate allowable toler-

ances or minimum/maximum limitations. Ex. “40,000 lbs.

(5%More/Less allowed)” or “38,000 to 42,000 lbs.”

V. Packing:

State type of packing allowable and restrictions if such are

required. Ex: “Bales not to exceed 60 inches”; “Bales not to

exceed 3,500 lbs.”

VI. Delivery:

Show complete address of shipping or delivery point, includ-

ing where applicable, specific rail siding or junction, forward-

ing warehouse, and party to be notified. Ex: “FOB (Actual

Point of Shipment) Chicago, Ill.”; “FOB (Actual Point of Deliv-

ery) St. Louis. Mo.”; “FAS Baltimore Container Yard”; “C&F

Tokyo. Japan.” If these details cannot be furnished at the

time of writing of contract, it should state “shipping/delivery

instructions to follow.” State means of conveyance to be

employed. State size and type of truck, rail car, container or

number of shipments expected or permitted.

VII. Shipment:

Time allowed for shipment or delivery should be clearly stat-

ed. Ex: “Shipment by Jan. 15, 2008 LATEST”; or “Delivery by

Jan. 15, 2008.” Indicate at whose option, Buyer’s or Seller’s,

shipment shall be made in time period stated.

VIII. Price:

State price per unit. Ex: “$20.00/CWT”; “20.00 Cents/

Pound”; “$400.00/Net Ton”; “$440.92/Metric Ton.” and

indicate where appropriate “Clean and Dry”; “Full Copper

Content.” If applicable, state exact processing, smelting,

refining charge, or unit deductions for impurities. (Avoid the

use of the word “penalties.”)

Scrap Specifications Circular 2017

Guidelines for Metals Transactions