(a) No packer whose average annual purchases of livestock exceed $500,000 shall purchase livestock on credit, and no dealer or market agency acting as an agent for such a packer shall purchase livestock on credit, unless: (1) Before purchasing such livestock the packer obtains from the seller a written acknowledgment as follows:
On this date I am entering into a written agreement for the sale of livestock on credit to ________________, a packer, and I understand that in doing so I will have no rights under the trust provisions of section 206 of the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 196,Pub. L. 94-410), with respect to any such credit sale. The written agreement for such selling on credit
Covers a single sale.
Provides that it will remain in effect until (date).
Provides that it will remain in effect until canceled in writing by either party.
(Omit the provisions not applicable.)
Date
Signature
(2) Such packer retains such acknowledgment, together with all other documents, if any, setting forth the terms of such credit sales on which the purchaser and seller have agreed, and such dealer or market agency retains a copy thereof, in his records for such time as is required by any law, or by written notice served on such person by the Administrator, but not less than two calendar years from the date of expiration of the written agreement referred to in such acknowledgment; and
(3) Such seller receives a copy of such acknowledgment.
(b) No dealer whose average annual purchases of livestock exceed $100,000 shall purchase livestock on credit unless:
(1) Before purchasing livestock on credit, the dealer obtains from the seller a written acknowledgement that includes the information described in this paragraph (b)(1).
(i) The following statement:
On this date I am entering into a written agreement for the sale of livestock on credit to ___, a dealer, and I understand that in doing so I will have no rights under the trust provisions of section 318 of the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 217b), with respect to any such credit sale.
(ii) A statement about whether the credit sales agreement covers a single sale; covers multiple sales and remains in effect through a certain date and states the date; or remains in effect until canceled in writing by either party.
(iii) The date the seller signed the agreement.
(iv) The seller's signature.
(2) The dealer retains the written acknowledgment, together with all other documents, if any, setting forth the terms of credit sales on which the purchaser and seller have agreed, and the dealer retains a copy thereof, in their records for such time as is required by any law, or by written notice served on the dealer by the Administrator, but not less than two calendar years from the date of expiration of the written agreement referred to in the acknowledgment.
(3) The dealer provides a copy of the acknowledgment to the seller.
(c) Purchasing livestock for which payment is to be made by a draft which is not a check shall constitute purchasing such livestock on credit within the meaning of paragraphs (a) and (b) of this section. (See also § 201.43(b)(1).)
(d) The provisions of this section shall not be construed to permit any transaction prohibited by § 201.61(a) relating to financing by market agencies selling on a commission basis.
(Approved by the Office of Management and Budget under control number 0580-0015)
[42 FR 49929, Sept. 8, 1977, as amended at 49 FR 39516, Oct. 9, 1984; 54 FR 37094, Sept. 7, 1989; 68 FR 75388, Dec. 31, 2003; 88 FR 41022, June 23, 2023]