[Code of Federal Regulations]
[Title 7, Volume 2]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR46.32]

[Page 274-276]
 
                          TITLE 7--AGRICULTURE
 
                        DEPARTMENT OF AGRICULTURE
 
PART 46_REGULATIONS (OTHER THAN RULES OF PRACTICE) UNDER THE 
PERISHABLE AGRICULTURAL COMMODITIES ACT, 1930--Table of Contents
 
Sec. 46.32  Duties of growers' agents.

    (a) General. The duties, responsibilities, and extent of the 
authority of a growers' agent depend on the type of contract made with 
the growers. Agreements between growers and agents should be reduced to 
a written contract clearly defining the duties and responsibilities of 
both parties and the extent of the agent's authority in distributing the 
produce. When such agreements between the parties are not reduced to 
written contracts, the agent shall have available a written statement 
describing the terms and conditions under which he will handle the 
produce of the grower during the current season and shall mail or 
deliver this statement to the grower on or before receipt of the first 
lot. A grower will be considered to have agreed to these terms if, after 
receiving such statement, he delivers his produce to the agent for 
handling in the usual manner. In the event an unsolicited lot of produce 
is accepted by an agent for handling in his usual manner, he shall 
promptly deliver or mail a copy of such statement to the grower. A copy 
of this statement, showing the name of the grower and the date the 
statement was delivered to the grower, shall be retained in the agent's 
files. An agent who does not have in his files either written contracts 
or a written statement as required herein is failing to prepare and 
maintain full and complete records as required by the Act. Provided, 
That regulations or bylaws of cooperative marketing associations may be 
used in lieu of individual agreements or contracts to determine the 
methods of accounting and settlement with their grower members. An agent 
who fails to perform any specification or duty, express or implied, is 
in violation of the Act and may be held liable for any damages resulting 
therefrom and for other penalties provided under the Act for such 
failure.
    (b) Accounting for charges. A growers' agent whose operations 
include such services as the planting, harvesting, grading, packing, 
furnishing of containers or other supplies, storing, selling or 
distributing produce for or on behalf of growers shall prepare and 
maintain complete records on all transactions in sufficient detail as to

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be readily understood and audited. Agents must be in a position to 
render to the growers accurate and detailed accountings covering all 
aspects of their handling of the produce. Agents shall maintain a record 
of all produce received in the form of a book (preferably a bound book) 
with numbered pages or comparable business records, showing for each lot 
the date received, quantity, the kind of produce and the name and 
address of the grower. Agents shall issue receipts to growers and others 
for all produce received. A lot number or other positive means of 
identification shall be assigned to each lot in order to segregate the 
various lots of produce received from different growers from similar 
produce being handled at the same time. Each lot shall be so identified 
and segregated throughout all operations conducted by the agent, 
including the sale or other disposition of the produce. The records 
shall show the result of all packing and grading operations, including 
the quantity lost through packing and grading and the quantity and 
quality packed out. If the culls are sold, they shall be included in the 
accounting. Unless there is a specific agreement with the growers to 
pool all various growers' produce, the accounting to each of the growers 
shall itemize the actual expenses incurred for the various operations 
conducted by the agent and all the details of the disposition of the 
produce received from each grower including all sales, adjustments, 
rejections, details of consigned or jointed shipments and sales through 
brokers, auctions, and status of all claims filed with or collected from 
the carriers. The agent shall prepare and maintain full and complete 
records on all details of such distribution to provide supporting 
evidence for the accounting. If an agent is working under a pool 
agreement with growers, the accounting shall show how the pool cost and 
pool sales prices are computed. If the agent and the growers have agreed 
on a fixed charge to cover the various operations conducted by the 
agent, actual expenses incurred for these services covered by the 
agreement are not required to be shown in the accounting. The failure of 
the agent to render prompt, accurate and detailed accountings in 
accordance with Sec. 46.2 (z) and (aa), is a violation of the Act.
    (c) Sales through brokers or auctions. Unless a growers' agent is 
specifically authorized in his contract with the growers to use the 
services of brokers, commission merchants, joint partners, or auctions, 
he is not entitled to use these methods of marketing the growers' 
produce. Any expense incurred for such services, without the growers' 
permission, cannot be charged to the growers.
    (d) Filing of carrier claims. Without the prior consent of the 
growers, an agent has no authority to file claims with the carriers in 
his own name or any other name. An agent has no obligation to file 
carrier claims on shipments for growers in the absence of a specific 
agreement to perform these duties. All information which an agent has 
received in handling the shipment which is essential for the growers to 
file such claims shall be made available to the growers. If an agent has 
an agreement with the growers to file and handle carrier claims, he 
shall exercise reasonable care in handling the claims with the carriers 
by filing the claim promptly in the proper amount, supported by adequate 
evidence, and take any necessary action to bring the matter to a 
conclusion.
    (e) Purchases and sales by growers' agents. A person who operates in 
a dual capacity, both as a growers' agent and as a shipper, shall 
clearly disclose his status in each transaction to all parties with whom 
he is dealing. If such a person misrepresents himself as an agent, when 
he is acting as a shipper selling produce he has purchased, he shall be 
considered to have violated the Act. A growers' agent shall not charge 
or receive a fee from the seller or the buyer when he purchases or sells 
produce as a shipper. A growers' agent shall not negotiate a transaction 
where he is subject to the direct or indirect control of any party to 
such transactions, other than his principal, or where the other party is 
subject to the agent's direct or indirect control, without fully 
disclosing the circumstances to his principal and obtaining his specific 
prior approval.
    (f) Negligence of agent. A growers' agent may be held liable for any 
loss or

[[Page 276]]

damage resulting to the growers due to his negligence or failure to 
perform any specification or duty, express or implied, arising out of 
any undertaking in connection with transactions subject to the Act.
    (g) Responsibility for payment. An agent is not responsible for the 
payment by the buyer who has purchased the growers' produce on credit, 
unless he guarantees payment or is negligent in extending credit. 
Agreement to collect from the buyer and remit to his principal is not a 
guarantee by the agent that the agent will pay if the buyer does not 
pay.
    (h) Responsibility for payment of selling fees and expenses to the 
growers' agent. In the absence of a specific agreement to the contrary, 
the agent does not guarantee the performance of the contracting parties 
and he is entitled to the payment of his selling fees and expenses 
incurred in handling the produce of growers or others, providing he 
fully performs his duties as agent.
    (i) Agent's financial responsibility to buyers for failure to comply 
with contracts. If a growers' agent contracts in his own name to deliver 
produce to a buyer and subsequently cannot deliver produce complying 
with the contract because the growers cannot or will not deliver such 
produce to him, he may be liable to the buyer for damages resulting from 
the breach of the contract.

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