Shea Butter Supply Agreement (Ghana)

A Shea Butter Supply Agreement in Ghana sets out the rights, duties and consideration binding the parties to it.

Ghana is one of the world's largest producers of shea butter, with the shea belt spanning the Northern, Upper East, Upper West, North East, and Savannah regions. The Ghana Shea Industry is regulated by the Ministry of Food and Agriculture (MOFA) and the Tree Crops Development Authority (TCDA), established under the Tree Crops Development Authority Act 2019 (Act 1010). The TCDA is responsible for the development, promotion, and regulation of tree crops including shea in Ghana, and registered shea buyers and processors must comply with the TCDA's quality and licensing requirements.

Section 1 of the Sale of Goods Act 1962 (Act 137) defines a contract for the sale of goods as a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. The Act implies conditions and warranties into contracts for the sale of goods in Ghana — including the condition that the goods shall correspond with their description under Section 13 of Act 137, that the goods shall be of merchantable quality under Section 14 of Act 137, and that the goods shall be fit for the buyer's purpose where that purpose has been communicated to the seller.

The Export and Import Act 1995 (Act 503) and the Ghana Export Promotion Authority (GEPA) govern the export of shea butter from Ghana. Exporters of shea butter must register with GEPA and comply with the export documentation requirements, including phytosanitary certificates issued by the Plant Protection and Regulatory Services Directorate (PPRSD) of MOFA. The Ghana Standards Authority (GSA) sets quality standards for shea butter under the Standards Authority Act 1999 (Act 566), and shea butter intended for export or sale to food manufacturers must meet GSA certification requirements.

The Food and Drugs Authority (FDA Ghana), established under the Food and Drugs Authority Act 2012 (Act 851), regulates shea butter used in food products and cosmetics. Shea butter supplied for use in food processing or cosmetic manufacture must comply with FDA Ghana standards. The Customs Act 2015 (Act 891) and the Ghana Revenue Authority (GRA) regulate the customs and excise obligations on exported shea butter, including export levies and any applicable export duties.

The Electronic Transactions Act 2008 (Act 772) recognises electronic signatures and records in Ghana. A Shea Butter Supply Agreement executed electronically is legally valid under Section 8 of Act 772. Disputes arising under a Shea Butter Supply Agreement in Ghana may be resolved before the High Court (Commercial Division) in Accra or through arbitration at the Ghana Arbitration Centre under the Alternative Dispute Resolution Act 2010 (Act 798).

A Shea Butter Supply Agreement in Ghana is needed whenever a shea butter producer, processor, or trader agrees to supply shea butter to a domestic or international buyer on a commercial basis.

A Shea Butter Supply Agreement is required when a Ghanaian shea processing company agrees to supply refined or unrefined shea butter to a European, American, or Asian cosmetic manufacturer on a recurring basis. The agreement sets out the product specification, the quantity per shipment, the delivery schedule, the price (whether fixed or linked to a benchmark), the payment terms, and the consequences of short shipment or quality failure.

A Shea Butter Supply Agreement is needed when an aggregator or trader purchases shea nuts or raw shea butter from smallholder farmers in the Northern, Upper East, Upper West, North East, or Savannah regions and agrees to supply a specified tonnage to a processing factory. The agreement protects both the aggregator and the factory from price and supply uncertainty.

A Shea Butter Supply Agreement is required when a Ghanaian exporter registered with the Ghana Export Promotion Authority (GEPA) contracts to supply organic-certified shea butter to a Fair Trade or organic food brand. The agreement must incorporate the quality and certification requirements of the relevant organic or Fair Trade standard alongside the requirements of the Ghana Standards Authority (GSA).

A Shea Butter Supply Agreement is needed when a Ghanaian shea processing company supplies shea oleine or shea stearine — the fractions derived from shea butter refining — to a Ghanaian food manufacturer for use in chocolate production or as a cocoa butter equivalent. The agreement must address the Food and Drugs Authority (FDA Ghana) requirements for food-grade shea butter under Act 851.

A Shea Butter Supply Agreement is required when a development finance institution or NGO operating in Ghana's shea belt structures a supply chain financing arrangement under which the buyer pre-finances shea nut collection in return for a guaranteed supply of processed shea butter.

Parties in Ghana should execute a Shea Butter Supply Agreement before the commencement of supply rather than relying on purchase orders alone, to establish the parties' obligations, quality standards, payment terms, and remedies for breach under the Sale of Goods Act 1962 (Act 137).

A binding Shea Butter Supply Agreement in Ghana under the Sale of Goods Act 1962 (Act 137) and the Contract Act 1960 (Act 25) must contain the following essential elements.

Parties: Full legal names and addresses of the supplier and the buyer. Where a party is a company incorporated under the Companies Act 2019 (Act 992), its ORC registration number should be stated. Where the supplier is registered with the Tree Crops Development Authority (TCDA) under the Tree Crops Development Authority Act 2019 (Act 1010), its TCDA registration number should be included.

Product Specification: A detailed description of the shea butter being supplied — whether raw (unrefined), processed (refined), organic-certified, or fractionated — including the free fatty acid (FFA) content, moisture content, colour, odour, and any applicable Ghana Standards Authority (GSA) or international quality standard (such as the Codex Alimentarius standard for shea). The specification defines the standard against which the goods will be tested on delivery.

Quantity and Delivery Schedule: The total quantity to be supplied under the agreement (expressed in metric tonnes or kilograms), the delivery schedule (whether single shipment, regular monthly lots, or as ordered), and the permitted tolerance for over- or under-delivery.

Price and Payment Terms: The agreed price per metric tonne or per kilogram of shea butter, expressed in Ghana Cedis (GHS) for domestic supply or in US Dollars (USD) for export contracts. The payment terms — whether prepayment, letter of credit, cash against documents, or net 30/60 days — and the bank account details for payment. For export contracts, the Incoterms applicable to the transaction (such as FOB Tema Port or CIF destination port) should be stated.

Delivery and Risk: The delivery point — whether at the supplier's processing facility, a Ghanaian warehouse, or the port of export — and the point at which risk of loss passes from the supplier to the buyer under Section 20 of the Sale of Goods Act 1962 (Act 137). Export documentation requirements — including GEPA export permit, GSA quality certificate, FDA Ghana certificate of analysis (where applicable), phytosanitary certificate from PPRSD, and GRA customs declaration under the Customs Act 2015 (Act 891) — should be allocated between the parties.

Quality Testing and Rejection: The procedure for testing the shea butter on delivery, the laboratory or inspection agency authorised to carry out testing, the timeframe within which the buyer must notify the supplier of any quality failure or shortfall, and the remedies available — including rejection, price reduction, or replacement supply — under Section 13 and Section 14 of the Sale of Goods Act 1962 (Act 137).

Warranties: The supplier's warranty that the shea butter supplied complies with the agreed specification, that the goods are free from contamination, that the supplier holds all required licences and registrations under the TCDA Act 2019 and the Food and Drugs Authority Act 2012 (Act 851), and that the goods comply with applicable export regulations under the Export and Import Act 1995 (Act 503).

Force Majeure: Provisions addressing crop failure due to drought or pest infestation in Ghana's shea belt, government export restrictions, and other events beyond the parties' reasonable control.

Governing Law and Dispute Resolution: Ghana law, with disputes resolved before the High Court (Commercial Division) in Accra or through arbitration at the Ghana Arbitration Centre under the Alternative Dispute Resolution Act 2010 (Act 798).

Forms-legal.com provides this Shea Butter Supply Agreement template as a starting point for shea butter supply transactions in Ghana. Parties should seek legal and trade advice for export contracts involving significant quantities or new international buyers.