Last week I drove to beautiful Monroe County, Indiana to present at an Indiana Winery and Vineyard Association (IWVA) annual meeting. We met at Creekbend Vineyard, Oliver Winery's commitment to producing wine from Indiana-grown grapes. The vineyard benefits from hilly well-drained limestone soil and the TLC of the Oliver family and employees.
I focused my presentation on the importance of using contracts in the grape/wine business. This advice holds for other specialty crops, too. Many businesses have traditionally relied on "handshake deals" for their supplies and/or sales. I understand the importance of personal relationships and relying on the idea that a person is just as good as their word. But the lawyer in me cries out for putting something on paper! Contracts aren't a sign you don't trust your business partners. Contracts give us a chance to work through the details during the negotiation process, leave a paper trail for our heirs or employees, and provide a roadmap of how the relationship will move forward. Of course, contracts also are there if something goes wrong in the future. They prevent either side from "misremembering" the agreement. Contracts can allocate risk and deal with pesky details like transportation costs.
I explained what provisions a grape purchase contract should contain. This can be different for each winery or vineyard -- some will be 10 pages long; some will be 2 pages. A good contract will at least include the basics: price, term, sale, parties, delivery, etc. There are other contracts important for the wine/grape business, including custom crush agreements, distributor contracts, and wine club agreements. The basics are the same - use clear, concise language to record what the parties agree to do. Save yourself the heartbreak down the road!
Call your attorney to learn more about contracts for your speciality crops.