Cacao purchase broker agreement template with commission and market resale terms. Essential for cocoa commodity brokers.

Cacao Purchase Broker Agreement: Commission and Market Resale Terms (Commission, Resale, and Risk—Written for Cacao Brokers)

Commodity cacao brokering sits in a narrow lane between trading, procurement, logistics, and relationship management—often across borders, currencies, and volatile pricing. A well-drafted cacao broker agreement is what keeps that lane safe. It clarifies when you’ve “earned” your fee, who can resell to whom, and what happens when a buyer or supplier changes course after you’ve put in the work.

This article is written from the service provider perspective (you, the broker) and focuses on two issues that commonly make or break a dispute: commission and market resale terms. It also ties those concepts back to core contract clauses you’ll want in any cacao commodity broker contract supporting a cocoa purchase contract (or multiple downstream purchase orders).

Note: This is educational information, not legal advice. Local law, export/import rules, and industry customs (e.g., Incoterms, quality standards, arbitration forums) can materially change what you should use.

Why a cacao purchasing broker agreement matters (even if you “only introduce parties”)

Many cacao deals start informally: a WhatsApp intro, a sample request, and then a flurry of draft POs. The problem is that the most expensive misunderstandings also start informally:

“We didn’t buy from that supplier, so no commission is due.”
“The buyer resold to its affiliate; the commission cap should apply.”
“You introduced them months ago; that wasn’t the same transaction.”
“The buyer rejected for quality; commission shouldn’t be paid.”
“The buyer and seller netted your fee out of the price without approval.”

A properly drafted chocolate raw materials broker agreement sets out the broker’s role, the trigger for commission, and what “resale” means—especially where buyers are traders or manufacturers who resell or transfer product within their group.

The broker’s scope: define what you are (and aren’t)

Before commission and resale terms, lock down scope. In cacao, your value might include supplier vetting, introductions, negotiation support, document coordination, shipment monitoring, or troubleshooting quality claims. Your agreement should specify which services are included and which aren’t.

Typical broker roles include:

Introduction broker: you connect buyer and seller; parties negotiate directly.
Transaction broker: you facilitate the negotiation and monitor execution.
Agent-style procurement support: you act as the buyer’s sourcing agent (sometimes with fiduciary-like duties depending on jurisdiction and wording).
Dual-sided broker: you charge both sides (allowed only with full disclosure and consent).

Contract tip: If you are not taking title, not handling money, and not guaranteeing performance, say so explicitly:

No authority to bind either party
No custody/handling of goods
No assumption of quality, delivery, or payment risk
No responsibility for taxes, duties, regulatory filings, or sanctions screening (unless you agree otherwise)

This becomes important when a dispute arises and someone tries to characterize you as the “seller” or “principal.”

Commission: the clause that should be painfully clear

1) Commission structure options commonly used in cacao

A broker agreement typically uses one of these structures:

Percentage of contract value (e.g., 1.0%–3.0% of total invoice value)
Per metric ton (e.g., USD $X/MT)
Tiered commission (higher fee for harder-to-source origins/grades, faster timelines, or higher volumes)
Success fee + retainer (retainer credited against success fee)

Drafting watch-out: If the commodity price floats (NY/ICE futures + differential), define the “Contract Value” carefully: is it based on the final invoice, provisional invoice, or fixed price at a specific pricing date?

2) When commission is “earned” vs. “payable”

This is the most common gap in a cacao broker agreement.

Earned: the event that creates your right to commission
Payable: the timing of when they must pay you

A broker-friendly approach often uses:

Earned upon signing of the cocoa purchase contract / PO (or upon acceptance of an offer that forms a binding agreement)
Payable upon invoice or upon the buyer’s payment to the seller (depending on leverage and commercial norms)

If buyers resist paying before shipment, you can compromise:

A portion payable at signing (or upon issuance of LC)
Balance payable upon shipment documents or delivery milestone

3) Commission trigger: define the “Transaction” and “Introduced Parties”

Commission disputes often arise when the buyer routes the deal through affiliates, alternate entities, or a new PO number.

Include precise definitions:

Introduced Parties: buyer, seller, and their affiliates, subsidiaries, related trading names
Transaction: any purchase, supply, off-take, framework agreement, spot purchase, renewal, extension, or amendment involving cacao beans, nibs, liquor, butter, powder, or other cacao derivatives (if applicable to your business)

Broker-protective concept: a tail period (e.g., 12–24 months) where commission is due on transactions concluded after the introduction, even if you’re no longer involved.

4) Commission and partial performance (short shipments, split lots, claims)

Cacao shipments can be short due to moisture loss, bag count discrepancies, port issues, or quality claims. Decide upfront:

Is commission calculated on contracted quantity or delivered/accepted quantity?
If a quality claim leads to a price adjustment, is commission based on original price or adjusted price?
If the buyer rejects and the seller resells, do you earn commission on the replacement deal?

Many brokers prefer:

Commission on invoiced and paid quantities, plus a clause requiring the parties to notify you of all adjustments and provide supporting documents.

5) Payment mechanics: invoicing, currency, taxes, and proof

Commission clauses should address:

Invoice timing (e.g., upon signing / upon shipment / monthly)
Payment term (e.g., 7–15 days)
Currency (USD/EUR/GBP) and FX conversion method
Bank fees (sender bears, “OUR” for international wires)
Withholding taxes: who is responsible; whether gross-up applies
Audit/verification rights: limited right to request the relevant PO, invoice, and proof of payment to confirm commission base

In cross-border brokering, withholding tax can be the surprise that turns “2%” into “1.5% received.” If gross-up is too aggressive for your client, at least require cooperation in providing tax documents or treaty forms.

Market resale terms: where cacao brokering gets tricky

1) What “resale” means in cacao supply chains

“Resale” isn’t only selling to a third party. In cacao, it might include:

Selling physical beans to another trader before arrival
Back-to-back contracts (buy from origin supplier, sell to manufacturer)
Transferring title to an affiliate, toll manufacturer, or financing SPV
Allocating lots across multiple end users after aggregation

If your commission is tied to the initial sale, you need to clarify whether downstream resale affects your fee and whether the buyer can circumvent you by shifting the transaction to another entity.

2) Resale restrictions vs. resale reporting: choose the right level

Not every broker should restrict resale. Often, the more realistic objective is visibility and protection against circumvention.

Two common approaches:

Resale permitted with reporting
Buyer can resell/transfer, but must notify broker and keep records; broker’s commission remains due based on original transaction (or specified basis).
Resale restricted without consent
Buyer cannot resell/assign the cocoa purchase contract or title without seller consent and broker notification. This is more common where the seller is sensitive to end destination, sanctions, certification claims, or brand risk.

A balanced clause might say:

Resale is allowed in the ordinary course to affiliates or customers, provided it does not reduce or avoid broker commission and does not violate origin/certification representations.

3) Commission on resale: do you get paid twice?

Some brokers attempt to collect commission on both the upstream purchase and downstream resale. That’s usually a hard sell unless:

You actively brokered both legs (you found the supplier and also found the end buyer), or
You are acting as a structured intermediary providing substantial services (financing, logistics, hedging coordination, etc.)

If your role is to broker a single purchase, your agreement can still protect you by stating:

Your commission is due regardless of subsequent resale, transfer, or re-invoicing of the product.

4) Anti-circumvention: the clause that protects your book of business

In cacao, once parties meet, they may continue trading for years. Your agreement should include:

Non-circumvention: introduced parties won’t bypass you for cacao transactions during the term and tail period
Affiliate capture: applies to affiliates and successor entities
Liquidated damages (where enforceable) or a clear commission entitlement as the remedy
Confidentiality around pricing, differentials, supplier identity, and logistics routes

This is often the difference between being “the broker who made the introduction” and being treated as a durable commercial partner.

Integrating these terms with the underlying cocoa purchase contract

Your broker agreement should not conflict with the actual cocoa purchase contract between buyer and seller. But it should anticipate the most common cacao contracting topics that influence commission and resale disputes:

Key commercial references to align

Product specs: origin, grade, fermentation, moisture, bean count, defect tolerance, certifications (Organic, Rainforest Alliance, Fairtrade), crop year
Quality determination method: sampling, inspection location, finality of certificates, dispute process
Pricing method: flat price vs. futures + differential; pricing date window
Incoterms: FCA/FOB/CIF/DAP, etc.—affects delivery milestones and risk transfer
Payment instrument: LC, CAD, open account; timing triggers
Force majeure: port congestion, strikes, export bans, weather events
Sanctions and compliance: KYC/AML expectations, restricted parties, origin claims

Practical drafting move for brokers

Include a clause that says your commission is not contingent on the enforceability or performance of any specific purchase contract term unless the failure is due solely to your fraud or willful misconduct. This avoids being dragged into disputes about quality or delivery.

Broker-friendly clause checklist (commission + resale focused)

If you’re negotiating your next cacao broker agreement, consider whether you have these items covered:

Defined “Introduced Parties” (including affiliates and successors)
Defined “Transaction” (including renewals, extensions, repeats, and related products if relevant)
Commission rate and base (invoice value? paid value? excludes taxes/freight?)
Earned vs. payable timing
Tail period for post-introduction trades
No set-off (buyer/seller can’t net your commission against other disputes)
Resale/transfer language (permitted, restricted, or reportable)
Anti-circumvention + confidentiality
Information rights to verify the commission base (limited, reasonable)
Dispute resolution (governing law, arbitration vs. courts, venue)
Limitation of liability (you are not responsible for shipment failure/quality unless you expressly assume it)
Compliance and ethics (anti-bribery, sanctions) appropriate for cross-border commodity work

Common negotiation points (and how brokers can respond)

“We only pay commission if the shipment is delivered and accepted.”

Response: Tie commission to a milestone you can control—like executed purchase order or LC issuance. If they need comfort, split payment: part at signing, remainder at shipment docs.

“We can’t include affiliates; procurement is done through different entities.”

Response: Affiliates are a standard circumvention path. Offer a list of known entities or define affiliates narrowly (control/ownership threshold) but keep them in.

“Resale is our business; we won’t accept restrictions.”

Response: Don’t restrict resale—require that resale/transfer does not reduce or avoid commission, and require notice/documentation for verification.

“We don’t want you to see our invoices.”

Response: Limit your audit right to specific fields (quantity, price basis, invoice total, counterparty name) and allow redactions of unrelated commercial terms.

Drafting example language (illustrative only)

Below are conceptual examples (not plug-and-play legal advice):

Commission Earned: “Commission is earned upon execution of a binding purchase agreement between Introduced Parties for the Product during the Term or Tail Period.”
Commission Payable: “Commission is payable within ten (10) days after Broker issues an invoice, and in any event no later than Buyer’s payment to Seller for the relevant shipment.”
Resale Neutrality: “Any resale, transfer, assignment, novation, or re-invoicing of the Product shall not reduce or extinguish Broker’s right to Commission.”
Tail Period: “Commission applies to Transactions concluded within eighteen (18) months following the last introduction or substantive negotiation facilitated by Broker.”
Non-Circumvention: “Introduced Parties shall not circumvent Broker directly or indirectly, including through affiliates, agents, or intermediaries, to avoid Commission.”

Your exact wording should reflect your jurisdiction, enforceability of liquidated damages, and market practice.

Operational best practices that support your contract terms

Even the best cacao commodity broker contract is easier to enforce when you keep clean records:

Save written evidence of introductions (emails, messages, meeting invites).
Confirm the commission in writing at the start of the mandate.
Maintain a deal log: counterparty, origin, spec, volume, pricing basis, Incoterms, expected shipment window.
Ask for PO numbers and shipment references early.
If a party claims “different deal,” document why it’s substantially related.

This documentation is often what turns a commission disagreement into a quick settlement.

Conclusion: commission and resale terms are the “center spine” of a broker agreement

For cacao brokers, commission and market resale terms aren’t boilerplate—they’re the clauses that determine whether your work is reliably monetized in a fast-moving, relationship-driven market. A strong cacao broker agreement defines the transaction scope, commission triggers, resale treatment, and anti-circumvention protections while staying compatible with the underlying cocoa purchase contract and operational realities of cacao logistics.

If you want to generate and tailor a broker-friendly chocolate raw materials broker agreement quickly—with clear commission triggers, affiliate coverage, resale language, and dispute clauses—consider using Contractable, an AI-powered contract generator at https://www.contractable.ai.

2025-08-24

Cacao Purchase Broker Agreement: Commission and Market Resale Terms (What Commodity Brokers Must Spell Out)

Miky Bayankin