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Glossary
2026-10-16 12:03

SPA (Sale and Purchase Agreement)

An SPA (Sale and Purchase Agreement) is the binding contract in which the seller agrees to deliver and the buyer agrees to pay for a specified cargo on specified terms. In an EN590 deal it is the only document in the chain that creates enforceable obligations to deliver and to pay.

At a glance

Signed byBuyer and seller
Legally bindingYes
WhenAfter the FCO is accepted and proof of product and funds are checked
Core clausesSpecification and tolerance, quantity, delivery terms (Incoterms), inspection, payment instrument and timing, title and risk transfer, penalties, force majeure, governing law, arbitration

How it is used in EN590 deals

Everything agreed in the FCO must be reflected in the SPA; anything left out should be treated as not agreed. After signature the buyer's bank issues the agreed payment instrument and the seller prepares loading. The inspection clause, saying whose results are final, often decides who wins a dispute.

Watch out for

  • SPAs where the seller's company differs from the one in the FCO.
  • Payment before inspection or before shipping documents.
  • Vague inspection clauses or no named inspection companies.

Related terms

FCO and SCODLCSBLCQ and Q inspectionFOB and CIF