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- Hello everyone that's
joining us tonight,

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Mark Cannella, UVM extension.

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And we are going to wait around
for about a minute or two

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and see if we get a few
more people into the lobby

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and then we'll start.

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All right, looks like we're ready to go.

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Again, Mark Cannella here.
University of Vermont extension.

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Glad to have you.

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Glad to have you join us for another one

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of our Acer Webinar series.

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So tonight's topic binding
contracts and legal agreements.

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I'll let you know, to be honest,

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this is new territory for me.

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This is something that I
feel is important to discuss,

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and I'm looking forward
to sharing with you

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some of the topics that I've
gotten into in my research

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and also hoping for a good conversation.

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So definitely encouraging folks

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to ask questions as we go.

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And we're gonna have, I
think, a quite a bit of time

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for Q and A.

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A little bit of housekeeping here,

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if you're new to Teams,

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know that there is a chat bucket,

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chat bubble up in the top ribbon.

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It's going to look like, you know,

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a little cartoon bubble,

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keep that open if you can.

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Cause I think we'll
have questions coming in

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and definitely encourage you all

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to type some things in.

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Also gonna actually going to
try out a live polling today

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and see if we can get that feature to work

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with our webinar software.

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Another bit of housekeeping too,

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we do have closed captioning
that's occurring right now.

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So if you look in that chat window,

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you'll see a caption link,

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which you can actually
see typing out real time,

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which is always pretty amazing.

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So if that helps you read
a little bit, go for it

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and that's there in the chat window.

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I think what we'll do as always,

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I'll present for a period of time,

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people will be muted.

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Ask questions, Mark Isselhardt,
our UVM Maple specialist

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is also here tonight and he will chime in

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and read some questions
out of the chat window

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when I take some breaks.

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And then at a certain period,

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we'll just unlock people's
microphone for general Q and A.

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So tonight's presentation,
really, you know,

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my goal is to give and
provide some background

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on these forms of legal agreements,

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specifically the concept
of binding contracts.

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I'm not a licensed attorney,

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I'm not a legal professional,

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so this will be general
and really going to come

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from the lens of me as
a business educator,

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as a business advisor looking at some

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of the different features of
these different agreements.

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And specifically, we're going
to look at generalizations

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for what we think a good sap,
sale and purchase agreement,

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could look like.

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This is a direction we think
our industry is headed,

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as the industry grows.

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And so we'll kind of dive in

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and it's going to be fair
game for some thoughts

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and some questions as well.

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Many of you have been to our
website, www.maplemanager.org.

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I want to give you a heads
up that we are working

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with legal professionals

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on the sap, purchase and sale agreement.

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We're also working with a boiler,

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working with them for
a boilerplate template

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on a Syrup, purchase and sales agreement.

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So those agreements aren't ready yet.

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We had hoped to have them
available to share tonight,

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but they should be forthcoming
in the next couple months.

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And then back to the Q and A,

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I'd like to really encourage you all,

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that if you do have
questions or considerations,

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the spoiler is my last slide,
basically, as you know,

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what could go wrong with these agreements

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between business parties.

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So, if you do have questions,

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anything you you chime in with tonight

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is actually going to help us quite a bit,

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as we build out a small team
of producers and lawyers

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to draft these boilerplates
and make them available.

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But as always Maplemanager.org.

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We've got a couple other resources.

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We've got business planning tools.

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We do have an Ask the Team,
if you've got questions,

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you can submit things right online there.

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I mentioned the legal resources.

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We did Sugar house lease and
sugar bush lease templates

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about a little over a year ago.

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And our Forestry team is also building out

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more forestry resources
in the next couple months.

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So definitely check that out.

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Looking ahead to the webinars coming up.

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Today's the 29th, binding
contracts and legal agreements.

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We've got two more scheduled so far.

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It's possible we may see a
couple more sessions come in

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for November.

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But on October 13th, we've
got Dr. Anthony D'Amato

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from University of Vermont

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that's going to give a presentation

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on maple forests and carbon,

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which really should be fascinating.

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And then later in the month
on Wednesday, October 27th,

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I'll be back with attorney
Jess Phelps here in Vermont.

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And we're going to have a presentation

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on Northeast forest land tax programs,

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specifically looking at some
of the tax abatement programs

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in Vermont, New York, Maine,
and possibly New Hampshire

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to provide an overview,

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definitely for people

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that are considering getting into sugar

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or considering getting
into forest land ownership

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at a scale where the taxes
are going to be something

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that's on their mind.

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A few more resources, we
always want to make sure people

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get to check out.

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Www.mapleresearch.org, a
growing archive of current

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and historical literature

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that's hit everything
from industry publications

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to more technical or academic journals,

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highly encourage you to check that out.

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University of Vermont
Proctor Maple YouTube channel

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has a growing number of videos.

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I encourage you to check that out.

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And then as always UVM Extension
maple program at large,

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Mark will hard us on tonight
and he does a great job

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and he's been updating
everything from new video links

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and new statistics.

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I think, especially as we approach

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the conference season here,

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we'll start to see more offerings

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for sessions that are coming up.

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So contracts in everyday
life, let's get going.

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You know, I think it's fair to start

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and say that this session
is to get us thinking

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about formal legal agreements.

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But it's not to say that we're
trying to encourage you all

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to get things in writing
and signed by a lawyer.

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However, though, you know,
I guess as I said earlier,

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I think as the industry grows,

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we recognize that there's going

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to be the opportunity for more players.

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There's certainly the
opportunity for more,

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I won't say more risk.

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There's certainly an opportunity
for more specialization

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for people to decide,
hey, I want to produce sap

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and hey, I want to produce,
or I want to process syrup.

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And we think as the community grows,

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there's going to be people
that are gonna evaluate

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the risk and their consequences

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and say, we need to have a
little bit more protection.

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So really this session today,

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isn't so much about
just the legal contract,

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but also the concept of a
business to business relationship

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and very straight forward.

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What are the things that we
look for in those relationships?

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And what's the attention we
can put on those relationships

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as they form to make
sure that both parties

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are really taken care
of in an equitable way.

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So with contracts, you know, honestly,

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we're less concerned about
the ones that get fulfilled

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and contracts and especially business

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or purchase contracts do get
fulfilled on a daily basis.

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And they're never written
down, but we buy things.

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We transact things regularly
and often it works out.

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But the ones we're concerned about,

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the ones where we want
to put our attention on

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is the agreements that could
create major consequences

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if they're not completed

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and if they're not fulfilled.

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So really I hate to be
worst case scenario,

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but this is risk management.

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So we have to kind of
have that thought process

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of what could go wrong.

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And then let's think about if
there's ways we do feel like

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we want to or need to be protected.

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So with that, I'm gonna stop here.

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This is going to be our first
try for a little live polling

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with the Microsoft Teams format.

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I'm going to give it a shot here.

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I'm gonna open up a poll.

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And I think you're going
to see it on your screen

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or in your chat window.

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If it works, it works.

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It doesn't work.

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Well, that'll be a disappointment.

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If you get a chance and if you see it,

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first question is how well
do you know this topic?

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Binding contracts, legal agreements.

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Do you feel like extremely well,

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just a little or not at all?

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And you should be able to
click a button and submit it.

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And I can see it in the chat window,

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but we've only got three responses.

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So let's let it go for a second.

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Oh, I'm going to X out.

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And I don't know if it's
going to terminate the poll.

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So if you've got an answer
and you want to get it in,

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you've got about two seconds to go here.

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All right, hopefully you got
in there and I can see it, 14%.

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We've probably got one or two people

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that really know things really well,

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and well you can help with the Q and A,

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because I put myself in that,

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just a little category here

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and we've got a few people

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that don't think they
know much about it at all.

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So that's a good start.

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And since it worked me
to try one more here.

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Next question, how much do you
need to understand contracts?

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Are any of you looking for
formal business agreements now,

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maybe you just learning for learning sake

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and maybe you'll need it in the future.

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And maybe you just don't know.

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So let's give another
chance there at the poll

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and see what we get for our group.

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All right, and Mark, if
I could just pick on you,

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is that showing up okay,

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and do you see that in the
chat window, the results?

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- [Mark] Yeah, it looks good, Mark.

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- Okay, good.

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So it worked.

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Well thanks everyone
for playing along there.

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And it's always helpful to
know as we do these programs,

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we are always trying to consider

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when to give people their
mics and their videos.

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And this live polling is this feature

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that we'd like to use more in classes

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and well, it's nice to know when IT works.

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So how much do you need
to understand contracts?

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Well, quite a bit of you,

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but if you are ready to do something now

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and people were thinking
about it, so that is great.

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Let's hopefully share some information

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and share your situations
if you're comfortable,

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when we get to Q and A.

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So reasons to prepare a contract.

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Well, is it possible,

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could it be possible
that someone could fail

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to remember the agreed upon terms

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if it was a handshake
or a verbal agreement?

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Could be totally unintentional,

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but let's be honest if
there's some sort of duress,

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some sort of unfortunate condition

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and someone doesn't
remember the terms of that,

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that could be problematic

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and certainly could raise a concern

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for the business relationship.

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Balancing risk appropriately

259
00:09:58,400 --> 00:10:00,760
between buyer and seller parties.

260
00:10:00,760 --> 00:10:02,880
This is something we do all the
time with business planning.

261
00:10:02,880 --> 00:10:05,090
I do it all the time with
transfer and succession planning,

262
00:10:05,090 --> 00:10:07,730
especially when there's
a senior business owner

263
00:10:07,730 --> 00:10:11,040
or a parent and a younger
generation son or daughter

264
00:10:11,040 --> 00:10:13,000
that's getting involved in the business.

265
00:10:13,000 --> 00:10:14,200
People are trying to understand

266
00:10:14,200 --> 00:10:15,810
if someone's got more risk on them

267
00:10:15,810 --> 00:10:19,250
and if we can have a relationship
that smooths this out.

268
00:10:19,250 --> 00:10:21,270
So there's certainly a reason
there to prepare a contract.

269
00:10:21,270 --> 00:10:23,830
If there's a reason that one person feels

270
00:10:23,830 --> 00:10:25,330
like they've got more of the risk

271
00:10:25,330 --> 00:10:27,234
or potentially someone's
got more of the power

272
00:10:27,234 --> 00:10:29,184
and don't feel that that's comfortable.

273
00:10:30,110 --> 00:10:32,120
Last reason here, a shortlist of reasons

274
00:10:32,120 --> 00:10:36,530
to prepare a contract is the
basics of the legal terms

275
00:10:36,530 --> 00:10:38,900
that I will be probably ill-prepared

276
00:10:38,900 --> 00:10:40,080
to explain too much tonight,

277
00:10:40,080 --> 00:10:42,600
but the very important legal terms

278
00:10:42,600 --> 00:10:46,360
that would identify the remedies
if the contract is broken,

279
00:10:46,360 --> 00:10:47,710
breached or unfulfilled.

280
00:10:47,710 --> 00:10:50,270
And again, this doesn't necessarily mean

281
00:10:50,270 --> 00:10:53,690
that everyone's going to
like the consequences,

282
00:10:53,690 --> 00:10:57,340
but the agreement in advance
of this is how we're going

283
00:10:57,340 --> 00:10:58,570
to deal with it.

284
00:10:58,570 --> 00:11:00,470
Whether it's a penalty
or it's whether we say

285
00:11:00,470 --> 00:11:01,750
this is going to be the process,

286
00:11:01,750 --> 00:11:04,370
the moderation or the mediation process

287
00:11:04,370 --> 00:11:05,590
to handle the resolution.

288
00:11:05,590 --> 00:11:07,680
Those are things that can
be discussed in advance.

289
00:11:07,680 --> 00:11:10,840
So when something goes
wrong, we've got a format.

290
00:11:10,840 --> 00:11:14,100
And I can say this from working
with some business conflicts

291
00:11:14,100 --> 00:11:17,930
between partnerships and a family LLCs

292
00:11:17,930 --> 00:11:20,450
that do have operating agreements set up.

293
00:11:20,450 --> 00:11:21,900
There is a lot of boilerplate

294
00:11:21,900 --> 00:11:23,310
in a legal operating agreement

295
00:11:23,310 --> 00:11:26,340
that says, this is how
we deal with problems.

296
00:11:26,340 --> 00:11:28,200
And when those situations get tense

297
00:11:28,200 --> 00:11:31,410
and people are feeling hurt or threatened.

298
00:11:31,410 --> 00:11:33,520
Boy, it's really nice to have
something to lean back on

299
00:11:33,520 --> 00:11:35,160
and say, oh, this is the boilerplate.

300
00:11:35,160 --> 00:11:36,690
This is the process.

301
00:11:36,690 --> 00:11:40,200
This is the list of things
we're going to go through.

302
00:11:40,200 --> 00:11:42,110
Let's go back to that
general relationship,

303
00:11:42,110 --> 00:11:46,180
whether it's a handshake or
whether it's a written format

304
00:11:46,180 --> 00:11:48,040
that you're going to pursue, you know,

305
00:11:48,040 --> 00:11:49,580
what's the general due diligence

306
00:11:49,580 --> 00:11:51,350
as you're building business relationships?

307
00:11:51,350 --> 00:11:52,280
And these are just a few,

308
00:11:52,280 --> 00:11:54,970
you might have some of your own here,

309
00:11:54,970 --> 00:11:57,520
but familiarity between
the buyer and the seller.

310
00:11:57,520 --> 00:12:01,050
Everyone wants to be aware
of who they're dealing with.

311
00:12:01,050 --> 00:12:03,860
Some of the big things
to look for financially,

312
00:12:03,860 --> 00:12:05,560
revenue problems or credit problems.

313
00:12:05,560 --> 00:12:08,760
Is there any reason to
think that the person

314
00:12:08,760 --> 00:12:12,120
or the business that you're
engaging with in this agreement

315
00:12:12,120 --> 00:12:13,760
could have issues?

316
00:12:13,760 --> 00:12:15,590
On the buyer side, we
certainly want to know

317
00:12:15,590 --> 00:12:17,860
if the buyer is going
to have revenue in hand

318
00:12:17,860 --> 00:12:19,150
to make payments.

319
00:12:19,150 --> 00:12:20,640
Credit is certainly relevant,

320
00:12:20,640 --> 00:12:22,890
especially for a syrup
processor that is going

321
00:12:22,890 --> 00:12:25,660
to have a lot of upfront costs
before the syrup is sold.

322
00:12:25,660 --> 00:12:27,231
Are they going to need advanced credit

323
00:12:27,231 --> 00:12:30,720
to pay their suppliers for
everything from glass jugs?

324
00:12:30,720 --> 00:12:31,780
In this situation tonight,

325
00:12:31,780 --> 00:12:34,210
the concept of maybe
buying sap and advance.

326
00:12:34,210 --> 00:12:35,720
And that goes both ways as well

327
00:12:35,720 --> 00:12:38,410
for the processor may be concerned,

328
00:12:38,410 --> 00:12:42,130
does the supplier in
fact have the capacity

329
00:12:42,130 --> 00:12:46,650
to get this product to them
as planned and as needed?

330
00:12:46,650 --> 00:12:47,890
And reliability in general,

331
00:12:47,890 --> 00:12:50,510
asking around and understanding
if people tend to do

332
00:12:50,510 --> 00:12:51,870
what they say they're going to do

333
00:12:51,870 --> 00:12:53,870
and how they conduct themselves,

334
00:12:53,870 --> 00:12:56,000
hopefully in a professional manner.

335
00:12:56,000 --> 00:12:57,510
Some general due diligence there.

336
00:12:57,510 --> 00:12:59,350
And then just this conversation,

337
00:12:59,350 --> 00:13:01,600
or this thought about leverage.

338
00:13:01,600 --> 00:13:04,830
Identifying who has the power.

339
00:13:04,830 --> 00:13:06,640
Power could come in different ways,

340
00:13:06,640 --> 00:13:08,730
certainly from a business format.

341
00:13:08,730 --> 00:13:11,280
I'd say honestly, having financing,

342
00:13:11,280 --> 00:13:13,120
having capital or having wealth

343
00:13:13,120 --> 00:13:14,641
is definitely one source of power.

344
00:13:14,641 --> 00:13:17,220
It insulates a person or a party

345
00:13:17,220 --> 00:13:19,430
from the risks or the fallout.

346
00:13:19,430 --> 00:13:22,190
Another prospect for
leverage here is options.

347
00:13:22,190 --> 00:13:26,440
And as we work through
the scenario of sap sales,

348
00:13:26,440 --> 00:13:29,830
sap buying and the same thing
could go for syrup buying,

349
00:13:29,830 --> 00:13:33,743
finished syrup sale or sale or buying.

350
00:13:34,700 --> 00:13:37,730
Someone who has options
can obviously navigate

351
00:13:37,730 --> 00:13:39,810
and find someone else
to replace the source

352
00:13:39,810 --> 00:13:42,260
or the destination of where
that product is going.

353
00:13:42,260 --> 00:13:43,830
Someone with limited options

354
00:13:43,830 --> 00:13:45,430
is gonna have a little less leverage.

355
00:13:45,430 --> 00:13:46,320
And that's going to factor

356
00:13:46,320 --> 00:13:48,600
into who's possibly bearing the risk

357
00:13:48,600 --> 00:13:53,360
and who may want to take some
steps to cover themselves.

358
00:13:53,360 --> 00:13:56,440
So as always here, this idea
of leverage and consequences,

359
00:13:56,440 --> 00:13:59,313
if something's not met,
if it falls through.

360
00:14:01,490 --> 00:14:03,130
Little bit of legal background here,

361
00:14:03,130 --> 00:14:04,290
I'm gonna emphasize little again

362
00:14:04,290 --> 00:14:06,350
from an extension farm specialist

363
00:14:06,350 --> 00:14:07,750
or farm business specialist.

364
00:14:08,610 --> 00:14:11,000
There is this concept
of statute of frauds,

365
00:14:11,000 --> 00:14:13,740
it's been adopted over
the centuries really.

366
00:14:13,740 --> 00:14:16,110
Dates back over a hundred years plus.

367
00:14:16,110 --> 00:14:18,180
Generally most states
have adopted some form

368
00:14:18,180 --> 00:14:19,180
of a statute of frauds.

369
00:14:19,180 --> 00:14:20,460
And I think this is really key

370
00:14:20,460 --> 00:14:24,840
and what I understand is that
the state's determination

371
00:14:24,840 --> 00:14:27,180
is gonna help you understand

372
00:14:27,180 --> 00:14:30,300
when these legal agreements are binding

373
00:14:30,300 --> 00:14:32,160
and what criteria may need to be met

374
00:14:32,160 --> 00:14:33,910
for them to be binding.

375
00:14:33,910 --> 00:14:37,030
In general, and this
comes up with a question

376
00:14:37,030 --> 00:14:38,390
of the handshake deal.

377
00:14:38,390 --> 00:14:42,410
And a handshake could be a
perfectly legitimate contract

378
00:14:42,410 --> 00:14:44,020
between two parties, but the question is,

379
00:14:44,020 --> 00:14:46,390
is it legally binding and enforceable?

380
00:14:46,390 --> 00:14:48,560
A lot of the states will
have a statute of frauds

381
00:14:48,560 --> 00:14:52,170
that says anything over
$500 as a transaction

382
00:14:52,170 --> 00:14:53,620
does need to be in writing.

383
00:14:53,620 --> 00:14:55,930
And I don't want to say
that that's in every state,

384
00:14:55,930 --> 00:14:58,920
but I want to encourage you
to look further into that

385
00:14:58,920 --> 00:15:01,940
if it's related to you,
this concept of over $500,

386
00:15:01,940 --> 00:15:04,690
maybe a criteria in your locale.

387
00:15:04,690 --> 00:15:08,300
Statutes of frauds also generally
cover real estate sales.

388
00:15:08,300 --> 00:15:09,860
And if any of you have bought a home,

389
00:15:09,860 --> 00:15:11,830
you certainly have gone
through the paperwork

390
00:15:11,830 --> 00:15:13,430
and signed things in triplicate

391
00:15:13,430 --> 00:15:17,130
and know that that there's a
large paper requirement there.

392
00:15:17,130 --> 00:15:20,170
Also the concept of a contract
that requires more than

393
00:15:20,170 --> 00:15:21,790
one year to fulfill.

394
00:15:21,790 --> 00:15:25,350
So as we go through the
process of thinking maple sap,

395
00:15:25,350 --> 00:15:27,960
maple syrup, or anything
else in the maple world,

396
00:15:27,960 --> 00:15:30,030
the duration of the
contract going over one year

397
00:15:30,030 --> 00:15:32,040
could certainly indicate
whether it does need

398
00:15:32,040 --> 00:15:34,323
to be in writing to be enforceable.

399
00:15:36,310 --> 00:15:37,860
Well, the things that I
think are worth noting,

400
00:15:37,860 --> 00:15:40,100
the UCC, Universal Commercial Code,

401
00:15:40,100 --> 00:15:41,280
is a great reference.

402
00:15:41,280 --> 00:15:43,310
In general, a lot of definitions and terms

403
00:15:43,310 --> 00:15:45,560
and processes for business relationships,

404
00:15:45,560 --> 00:15:47,500
business transactions that are going

405
00:15:47,500 --> 00:15:49,160
to be referenced quite a bit,

406
00:15:49,160 --> 00:15:50,590
either in a formal legal agreement

407
00:15:50,590 --> 00:15:53,170
or in the background to get there.

408
00:15:53,170 --> 00:15:54,670
Something of not also,

409
00:15:54,670 --> 00:15:57,300
the Perishable Agricultural
Commodities Act,

410
00:15:57,300 --> 00:16:00,640
maybe not noteworthy in the
sense that I looked it up.

411
00:16:00,640 --> 00:16:04,980
This is a pretty clear legal
policy that was instituted

412
00:16:04,980 --> 00:16:07,490
to protect primarily
fresh fruit and vegetable

413
00:16:07,490 --> 00:16:09,630
because of its perishable product.

414
00:16:09,630 --> 00:16:12,690
And it does provide certain protections

415
00:16:12,690 --> 00:16:14,670
in the sense that the
buyers and the sellers

416
00:16:14,670 --> 00:16:16,500
need to be aware of the perishability

417
00:16:16,500 --> 00:16:18,990
and the fact that certain
parties need to do certain things

418
00:16:18,990 --> 00:16:21,280
to make sure that that
product can be attended to

419
00:16:21,280 --> 00:16:23,940
without it spoiling or going bad.

420
00:16:23,940 --> 00:16:26,040
I think this is highly
related to maple sap,

421
00:16:26,040 --> 00:16:28,780
but this is an agreement
that was basically set up

422
00:16:28,780 --> 00:16:30,440
for fresh vegetables and fruit.

423
00:16:30,440 --> 00:16:32,300
And a number of other
specialty products have been

424
00:16:32,300 --> 00:16:33,980
identified as covered.

425
00:16:33,980 --> 00:16:35,420
And I found just in general research,

426
00:16:35,420 --> 00:16:37,140
maple sap is not covered.

427
00:16:37,140 --> 00:16:39,390
I don't know if that's
something to pursue or not,

428
00:16:39,390 --> 00:16:42,090
but it's certainly a reference
point for what could go wrong

429
00:16:42,090 --> 00:16:43,413
and it is worth checking.

430
00:16:45,940 --> 00:16:48,290
So now let's get to the reality for you.

431
00:16:48,290 --> 00:16:50,600
Handshake deals, verbal
agreements are commonplace,

432
00:16:50,600 --> 00:16:52,500
and we're not trying to
diminish them at all.

433
00:16:52,500 --> 00:16:54,940
Let's take this as an educational
venture of what we really

434
00:16:54,940 --> 00:16:57,040
need to discuss between the parties.

435
00:16:57,040 --> 00:16:58,920
And then at that point,

436
00:16:58,920 --> 00:17:00,660
really have the reckoning

437
00:17:00,660 --> 00:17:02,830
in saying, how much risk do you face

438
00:17:02,830 --> 00:17:04,180
and how much can you tolerate?

439
00:17:04,180 --> 00:17:06,590
Everyone on this call
probably has a different level

440
00:17:06,590 --> 00:17:07,510
of risk tolerance.

441
00:17:07,510 --> 00:17:10,360
Some from personality and
some from just your position

442
00:17:10,360 --> 00:17:11,260
where your business is.

443
00:17:11,260 --> 00:17:13,030
Maybe it's more or less established.

444
00:17:13,030 --> 00:17:14,840
Again, back to credit and finance,

445
00:17:14,840 --> 00:17:18,120
how much risk can you bear
without it being too painful?

446
00:17:18,120 --> 00:17:19,550
And this a decision you're all going

447
00:17:19,550 --> 00:17:20,570
to have to make independently

448
00:17:20,570 --> 00:17:22,180
and with your business relationships.

449
00:17:22,180 --> 00:17:24,460
But, that magnitude of risk is something

450
00:17:24,460 --> 00:17:26,910
that is going to be a factor here.

451
00:17:26,910 --> 00:17:29,250
And then back again to that
risk sharing and risk shifting,

452
00:17:29,250 --> 00:17:31,900
if you're in a partnership or
engaging in one where you feel

453
00:17:31,900 --> 00:17:33,870
like you want to balance it out,

454
00:17:33,870 --> 00:17:36,070
I have mentioned already
the possibility there

455
00:17:36,070 --> 00:17:37,173
with contracts.

456
00:17:38,570 --> 00:17:43,070
So let's look at some essential
elements of a contract here.

457
00:17:43,070 --> 00:17:44,270
Couple more boilerplates,

458
00:17:44,270 --> 00:17:47,040
and then we're gonna kind of
flush through this concept

459
00:17:47,040 --> 00:17:49,730
of a sap sale and purchase agreement

460
00:17:49,730 --> 00:17:52,180
and see if we've hit some
of the considerations.

461
00:17:52,180 --> 00:17:54,590
So five essential elements of a contract.

462
00:17:54,590 --> 00:17:56,980
Number one, all parties
have the mental capacity

463
00:17:56,980 --> 00:17:59,320
to enter into the contract.

464
00:17:59,320 --> 00:18:00,550
I'm sure that could be disputed

465
00:18:00,550 --> 00:18:01,820
and I'm sure it will be in the future,

466
00:18:01,820 --> 00:18:04,920
but the general essential
element is there that we want

467
00:18:04,920 --> 00:18:06,410
to know who we're dealing with

468
00:18:06,410 --> 00:18:10,160
and know that everyone's of
sound mind to enter into it.

469
00:18:10,160 --> 00:18:13,020
Number two, all parties
have an idea of the nature

470
00:18:13,020 --> 00:18:14,470
or purpose of the contract.

471
00:18:14,470 --> 00:18:15,970
This is pretty basic from what I read,

472
00:18:15,970 --> 00:18:17,840
but if you're talking about selling sap,

473
00:18:17,840 --> 00:18:19,940
you need to specify, we're
talking about selling sap.

474
00:18:19,940 --> 00:18:22,400
We're not talking about
selling syrup in a barrel.

475
00:18:22,400 --> 00:18:25,530
And so being specific so
that both parties are firmly

476
00:18:25,530 --> 00:18:28,030
understanding what it is
we're talking about here.

477
00:18:29,400 --> 00:18:30,650
And three more here.

478
00:18:30,650 --> 00:18:34,430
Number three, so an offer to
enter a contract must exist,

479
00:18:34,430 --> 00:18:35,980
gotta be clearly offered.

480
00:18:35,980 --> 00:18:38,850
And then number four, there
has to be a clear acceptance

481
00:18:38,850 --> 00:18:39,930
of an offer.

482
00:18:39,930 --> 00:18:42,110
And from what I understand
a clear acceptance

483
00:18:42,110 --> 00:18:46,150
does not mean there needs to
be the absence of a deferral.

484
00:18:46,150 --> 00:18:49,570
There needs to be a clear
acceptance of the contract.

485
00:18:49,570 --> 00:18:51,060
And then number five, the contract,

486
00:18:51,060 --> 00:18:52,540
as we'll see in a little bit,

487
00:18:52,540 --> 00:18:55,070
we'll certainly have what
they call consideration.

488
00:18:55,070 --> 00:18:57,020
A promise to do something

489
00:18:57,020 --> 00:18:58,970
and/or the promise to exchange something

490
00:18:58,970 --> 00:19:01,283
to be specified in the relationship.

491
00:19:02,310 --> 00:19:06,793
So boilerplate essentials
to entering into a contract.

492
00:19:09,390 --> 00:19:13,500
Next, I'm going to look at
four slightly different forms

493
00:19:13,500 --> 00:19:18,500
of contracts, very general,
very satellite view here.

494
00:19:18,500 --> 00:19:20,280
Really, I think to
provide an understanding

495
00:19:20,280 --> 00:19:22,700
that these can be done a
couple of different ways,

496
00:19:22,700 --> 00:19:24,310
and the ways that they're done

497
00:19:24,310 --> 00:19:26,193
do have some different implications.

498
00:19:27,160 --> 00:19:27,993
In a few minutes,

499
00:19:27,993 --> 00:19:29,140
we'll dive into the concept

500
00:19:29,140 --> 00:19:30,610
of a purchase and sales agreement,

501
00:19:30,610 --> 00:19:32,670
and we'll look at different
features and elements

502
00:19:32,670 --> 00:19:34,280
that we've decided so far,

503
00:19:34,280 --> 00:19:37,400
we think here at UVM are relevant.

504
00:19:37,400 --> 00:19:38,420
So I'm going to hold that one,

505
00:19:38,420 --> 00:19:39,760
but just know that this concept

506
00:19:39,760 --> 00:19:41,580
of a purchase and sale agreement,

507
00:19:41,580 --> 00:19:42,900
the idea of two parties saying,

508
00:19:42,900 --> 00:19:44,174
hey, we're going to do business

509
00:19:44,174 --> 00:19:46,920
and here's the specifics of that business.

510
00:19:46,920 --> 00:19:48,660
We'll look at that in a minute.

511
00:19:48,660 --> 00:19:51,390
The second example here
is a production contract.

512
00:19:51,390 --> 00:19:53,430
This is something that we probably,

513
00:19:53,430 --> 00:19:54,610
for better or worse are familiar

514
00:19:54,610 --> 00:19:57,240
with hearing about poultry
contracts let's say.

515
00:19:57,240 --> 00:20:00,930
There is the potential to
develop a binding contract,

516
00:20:00,930 --> 00:20:03,230
a binding agreement between two parties.

517
00:20:03,230 --> 00:20:05,760
And in the essence of
a production contract,

518
00:20:05,760 --> 00:20:07,040
it's really notable

519
00:20:07,040 --> 00:20:09,590
that the producer may
actually have no legal title

520
00:20:09,590 --> 00:20:10,650
to their crop.

521
00:20:10,650 --> 00:20:12,920
The agreement needs to
be established in advance

522
00:20:12,920 --> 00:20:14,710
of the production process.

523
00:20:14,710 --> 00:20:17,380
But once that agreement is
set in this form of contract,

524
00:20:17,380 --> 00:20:18,850
the crop is actually considered bailment.

525
00:20:18,850 --> 00:20:20,090
I don't don't know what that mean,

526
00:20:20,090 --> 00:20:23,020
but I would say it's more of
like the crop is in custody,

527
00:20:23,020 --> 00:20:26,500
but it's not so much owned by the producer

528
00:20:26,500 --> 00:20:28,950
because the contract
has already established

529
00:20:28,950 --> 00:20:31,370
that the ownership really
goes to the end buyer

530
00:20:31,370 --> 00:20:32,990
or the processor.

531
00:20:32,990 --> 00:20:36,390
I think this is actually quite
common with grain elevators

532
00:20:36,390 --> 00:20:40,170
or situations where a
commodity like a cereal,

533
00:20:40,170 --> 00:20:44,150
grain or corn is shipped over
and delivered to a location.

534
00:20:44,150 --> 00:20:47,240
It's held there, but it's not
actually owned by the person

535
00:20:47,240 --> 00:20:49,670
that has the drying facility or the silo.

536
00:20:49,670 --> 00:20:50,710
It's still owned by the farmer.

537
00:20:50,710 --> 00:20:52,310
It's just transitioning through.

538
00:20:54,690 --> 00:20:56,490
So we've got a purchase
and sale agreement separate

539
00:20:56,490 --> 00:20:58,310
from a production contract.

540
00:20:58,310 --> 00:21:00,270
A couple other here that
may be on the fringes,

541
00:21:00,270 --> 00:21:02,410
but we're noticing or noting,

542
00:21:02,410 --> 00:21:04,150
the concept of an independent contractor.

543
00:21:04,150 --> 00:21:06,670
Well, I think we all hire
independent contractors,

544
00:21:06,670 --> 00:21:08,503
whether they're formally,

545
00:21:10,310 --> 00:21:13,050
formally set up in paperwork
or not could, could depend,

546
00:21:13,050 --> 00:21:15,490
but tubing installation is
something we know is occurring

547
00:21:15,490 --> 00:21:18,200
quite readily around our industry.

548
00:21:18,200 --> 00:21:20,870
And there's other contract
services that anyone might need

549
00:21:20,870 --> 00:21:23,920
for their business that's not
specific to the syrup itself.

550
00:21:23,920 --> 00:21:27,310
I think a current or a specific point here

551
00:21:27,310 --> 00:21:28,410
for an independent contractor

552
00:21:28,410 --> 00:21:30,890
is this is where you can
get into an agreement

553
00:21:30,890 --> 00:21:34,210
where the agreement may
actually require performance

554
00:21:34,210 --> 00:21:35,640
of a special function

555
00:21:35,640 --> 00:21:37,960
or particular production method per se,

556
00:21:37,960 --> 00:21:39,620
could be prescribed

557
00:21:39,620 --> 00:21:41,720
in an independent contractor relationship.

558
00:21:42,900 --> 00:21:44,880
Looking at something a
little different here,

559
00:21:44,880 --> 00:21:46,740
a personal service contract,

560
00:21:46,740 --> 00:21:48,610
I guess another flavor
here for a relationship.

561
00:21:48,610 --> 00:21:51,150
And this is one that really
focuses on the service.

562
00:21:51,150 --> 00:21:54,250
So an example that I
think is possible here,

563
00:21:54,250 --> 00:21:55,990
looking less at the product output.

564
00:21:55,990 --> 00:21:59,520
So let's say less about a
purchase and sale agreement

565
00:21:59,520 --> 00:22:02,740
that's specific to the
volume of sap coming

566
00:22:02,740 --> 00:22:03,573
off a sugar bush,

567
00:22:03,573 --> 00:22:05,430
and going to somebody else's tank.

568
00:22:05,430 --> 00:22:07,570
This could be a situation
where perhaps a landowner

569
00:22:07,570 --> 00:22:08,900
has a sugar bush,

570
00:22:08,900 --> 00:22:10,340
the relationship isn't really set up

571
00:22:10,340 --> 00:22:11,400
on the provision of sap.

572
00:22:11,400 --> 00:22:13,820
It may be the provision
of maintaining the woods

573
00:22:13,820 --> 00:22:16,220
or running the system, borderline here,

574
00:22:16,220 --> 00:22:18,800
whether you've got an
employee relationship or not.

575
00:22:18,800 --> 00:22:21,770
But I think there are definitely
certain service contracts

576
00:22:21,770 --> 00:22:24,410
that could relate to forest
management and stewardship

577
00:22:24,410 --> 00:22:27,200
that's not necessarily
related to the transaction

578
00:22:27,200 --> 00:22:29,173
of say sap or syrup.

579
00:22:30,520 --> 00:22:33,230
So there's four very basic
agreement formats, just, I think,

580
00:22:33,230 --> 00:22:37,020
to make people aware that your
relationship may be different

581
00:22:37,020 --> 00:22:40,263
in different type of agreement
may need to be set up.

582
00:22:41,570 --> 00:22:43,230
So now I think for the
next few minutes here,

583
00:22:43,230 --> 00:22:45,570
we're gonna look at really the draft

584
00:22:45,570 --> 00:22:48,600
of the maple sap purchase
and sales agreement.

585
00:22:48,600 --> 00:22:50,560
I'm going to lay out some of
the different features that,

586
00:22:50,560 --> 00:22:53,050
for myself and conversations
with a few sugar makers

587
00:22:53,050 --> 00:22:55,920
and some business specialists,
what we think is relevant.

588
00:22:55,920 --> 00:22:58,470
And then at that point, I think
maybe in 10 or 15 minutes,

589
00:22:58,470 --> 00:22:59,870
open it up for some real Q and A,

590
00:22:59,870 --> 00:23:01,890
and some additions for sure.

591
00:23:01,890 --> 00:23:04,550
I also want to thank
some of our colleagues

592
00:23:04,550 --> 00:23:05,460
down in West Virginia.

593
00:23:05,460 --> 00:23:08,020
A couple years ago, I
actually got a basic template

594
00:23:08,020 --> 00:23:08,853
in West Virginia.

595
00:23:08,853 --> 00:23:09,686
They were already starting

596
00:23:09,686 --> 00:23:12,300
to look at binding contract templates

597
00:23:12,300 --> 00:23:15,310
for maple and other tree syrups.

598
00:23:15,310 --> 00:23:17,250
And so we took some of
the information from them,

599
00:23:17,250 --> 00:23:19,380
and I think we're going
to look to add to it

600
00:23:19,380 --> 00:23:20,910
with our template coming out of UVM.

601
00:23:20,910 --> 00:23:23,620
But thanks to those down in
West Virginia that shared some

602
00:23:23,620 --> 00:23:24,993
of that foundational work.

603
00:23:26,800 --> 00:23:28,000
So what are we looking for?

604
00:23:28,000 --> 00:23:28,900
General goals here.

605
00:23:28,900 --> 00:23:30,260
Let's start general.

606
00:23:30,260 --> 00:23:33,910
Well, if I'm a sap seller, I'm
looking for timely payment,

607
00:23:33,910 --> 00:23:36,260
whichever time we agree
to, but timely payment.

608
00:23:36,260 --> 00:23:39,100
And if I'm a sap buyer,
what am I looking for?

609
00:23:39,100 --> 00:23:41,340
I'm going to be looking for
performance expectations

610
00:23:41,340 --> 00:23:42,360
to be met.

611
00:23:42,360 --> 00:23:43,620
In a minute here, we'll dive more

612
00:23:43,620 --> 00:23:45,360
into those performance expectations.

613
00:23:45,360 --> 00:23:47,160
But in general, people want to get

614
00:23:47,160 --> 00:23:48,880
what they're supposed to
get out of the agreement

615
00:23:48,880 --> 00:23:49,780
when they want it.

616
00:23:52,300 --> 00:23:54,510
I think I've got seven or
eight key features here

617
00:23:54,510 --> 00:23:57,270
of a sap purchase and sale agreement.

618
00:23:57,270 --> 00:23:58,300
I'll work through them in chunks,

619
00:23:58,300 --> 00:23:59,280
and we'll go into specific.

620
00:23:59,280 --> 00:24:01,750
So we're going to want to make
sure the agreement identifies

621
00:24:01,750 --> 00:24:04,950
the parties, certainly always
want legal entity names.

622
00:24:04,950 --> 00:24:06,380
We're going to need to define the product.

623
00:24:06,380 --> 00:24:08,170
Remember the essentials
of the contract here,

624
00:24:08,170 --> 00:24:10,300
make it clear if we're talking about sap,

625
00:24:10,300 --> 00:24:11,500
we're talking about sap.

626
00:24:12,390 --> 00:24:13,223
I'll go through quickly.

627
00:24:13,223 --> 00:24:15,070
And then we'll dive in more specifically.

628
00:24:15,070 --> 00:24:17,310
Contract type, we've got a
couple of different options

629
00:24:17,310 --> 00:24:19,730
for contract types that
are worth considering.

630
00:24:19,730 --> 00:24:22,420
Contract duration, terms of renewal

631
00:24:22,420 --> 00:24:23,760
and then the performance criteria.

632
00:24:23,760 --> 00:24:25,050
This is going to get into the specific

633
00:24:25,050 --> 00:24:27,730
of what that product needs to look like,

634
00:24:27,730 --> 00:24:29,623
or what shape it needs to be in.

635
00:24:31,270 --> 00:24:33,690
What else do we want to
see in this agreement?

636
00:24:33,690 --> 00:24:36,040
We want to have some,
some specifics on price,

637
00:24:36,040 --> 00:24:39,110
either clearly stated or clear
reference to where it would

638
00:24:39,110 --> 00:24:42,223
be found and where it might
change, or when it might change.

639
00:24:43,580 --> 00:24:44,413
Next, we're going to want

640
00:24:44,413 --> 00:24:45,870
to have different data requirements.

641
00:24:45,870 --> 00:24:47,730
If there's an inspection
or receiving process

642
00:24:47,730 --> 00:24:49,830
that needs to be built into the agreement.

643
00:24:52,320 --> 00:24:55,600
And then finally, terms of payment.

644
00:24:55,600 --> 00:24:58,320
And then this big bucket of legal details.

645
00:24:58,320 --> 00:24:59,290
Now, tonight, I'll be clear.

646
00:24:59,290 --> 00:25:00,123
I'm not an attorney,

647
00:25:00,123 --> 00:25:01,550
so I really can't get into the specifics

648
00:25:01,550 --> 00:25:02,520
of all the legal details.

649
00:25:02,520 --> 00:25:03,400
We could talk about them,

650
00:25:03,400 --> 00:25:05,230
but these are certainly essential.

651
00:25:05,230 --> 00:25:07,900
So tonight what I'd
like to do is go through

652
00:25:07,900 --> 00:25:11,850
in a little more
specificity these five here,

653
00:25:11,850 --> 00:25:14,820
and then let's call out
some questions we have

654
00:25:14,820 --> 00:25:16,007
or things we're not sure of.

655
00:25:16,007 --> 00:25:18,080
And we'll certainly attend
to those in templates.

656
00:25:18,080 --> 00:25:20,620
But, let's look at the
ones we can talk most about

657
00:25:20,620 --> 00:25:21,653
and see where we go.

658
00:25:22,540 --> 00:25:24,240
So let's define the product first.

659
00:25:25,600 --> 00:25:26,920
Are we talking raw sap?

660
00:25:26,920 --> 00:25:28,340
Are we talking concentrate?

661
00:25:28,340 --> 00:25:29,690
These are things that are pretty basic,

662
00:25:29,690 --> 00:25:31,370
but need to be spelled out.

663
00:25:31,370 --> 00:25:32,750
I think the concept of delivery

664
00:25:32,750 --> 00:25:35,130
from what I understand
would be very well worth

665
00:25:35,130 --> 00:25:37,210
getting right on the front
in the product exchange,

666
00:25:37,210 --> 00:25:39,290
but this could come up
again in the details

667
00:25:39,290 --> 00:25:40,700
of the performance expectation.

668
00:25:40,700 --> 00:25:43,790
So, define the product is
generally from what I've seen,

669
00:25:43,790 --> 00:25:47,350
and I've read a lot of
winery and grape contracts

670
00:25:47,350 --> 00:25:48,570
in the past couple of weeks.

671
00:25:48,570 --> 00:25:50,060
This section does not
need to be very long,

672
00:25:50,060 --> 00:25:51,120
just needs to be really clear.

673
00:25:51,120 --> 00:25:52,000
What are we dealing with?

674
00:25:52,000 --> 00:25:53,400
What's the business at hand?

675
00:25:55,040 --> 00:25:58,920
The contract type, this is
something to think about here.

676
00:25:58,920 --> 00:26:01,560
And I think this goes to the nature

677
00:26:01,560 --> 00:26:03,910
of who you are and kind
of what the parties

678
00:26:03,910 --> 00:26:06,460
each need and what their options are.

679
00:26:06,460 --> 00:26:08,379
There is an option, and
this is again common

680
00:26:08,379 --> 00:26:10,680
in the winery and grape industry

681
00:26:10,680 --> 00:26:14,490
to have a coverage sales
agreement for the whole acres,

682
00:26:14,490 --> 00:26:16,580
and in this case the whole number of taps.

683
00:26:16,580 --> 00:26:17,413
In the winery world,

684
00:26:17,413 --> 00:26:19,010
it could say here's a particular acreage

685
00:26:19,010 --> 00:26:23,340
or a particular parcel, a
particular subset of vines,

686
00:26:23,340 --> 00:26:27,080
but the assumption is the full
production from the producer

687
00:26:27,080 --> 00:26:29,650
would be transferred to the buyer.

688
00:26:29,650 --> 00:26:33,100
That's one way the agreement
could be established.

689
00:26:33,100 --> 00:26:35,070
Another way an agreement
could be established

690
00:26:35,070 --> 00:26:37,080
would be based on volume.

691
00:26:37,080 --> 00:26:38,930
And I think what this lends itself to

692
00:26:39,834 --> 00:26:41,500
is the conversation or the potential

693
00:26:41,500 --> 00:26:45,540
that the processor could
have capacity limitations

694
00:26:45,540 --> 00:26:47,330
at any point in the process.

695
00:26:47,330 --> 00:26:48,910
So it is common.

696
00:26:48,910 --> 00:26:50,540
And we've seen this in other industries

697
00:26:50,540 --> 00:26:54,240
for a volume-based contract to stipulate

698
00:26:54,240 --> 00:26:56,490
that there's a certain number of,

699
00:26:56,490 --> 00:26:59,160
in this case, we're saying sap,
a certain number of gallons.

700
00:26:59,160 --> 00:27:02,320
It could be delivered
potentially in a day,

701
00:27:02,320 --> 00:27:04,220
potentially in a week.

702
00:27:04,220 --> 00:27:06,993
There's a potential cap
on the amount of gallons

703
00:27:06,993 --> 00:27:10,200
that could be delivered over the season.

704
00:27:10,200 --> 00:27:12,400
And what I want to note
here also is just kind

705
00:27:12,400 --> 00:27:13,810
of the boundaries on the season.

706
00:27:13,810 --> 00:27:17,190
Because we've got, I know sap
producers in different regions

707
00:27:17,190 --> 00:27:19,770
have different capacity to produce sap.

708
00:27:19,770 --> 00:27:22,920
We've also got the
processor consideration on

709
00:27:22,920 --> 00:27:24,580
where they're at in their season.

710
00:27:24,580 --> 00:27:27,060
And at what point they
decide that they're no longer

711
00:27:27,060 --> 00:27:29,193
in production of finished maple syrup.

712
00:27:30,180 --> 00:27:31,900
So those are two good
considerations there.

713
00:27:31,900 --> 00:27:33,730
And I think you can think
about them in different ways

714
00:27:33,730 --> 00:27:35,970
if you're a buyer or your seller,

715
00:27:35,970 --> 00:27:38,040
if you want to move the whole production,

716
00:27:38,040 --> 00:27:39,680
or if there needs to be some,

717
00:27:39,680 --> 00:27:43,390
some more specificity to make
sure that that flow of goods

718
00:27:43,390 --> 00:27:45,120
is going to be timed right,

719
00:27:45,120 --> 00:27:47,770
especially with production
capacity in a sugar house.

720
00:27:50,090 --> 00:27:52,603
So some performance criteria here.

721
00:27:53,800 --> 00:27:55,710
I'm going to give you a few
here that are subjective,

722
00:27:55,710 --> 00:27:57,130
possibly qualitative.

723
00:27:57,130 --> 00:27:57,980
And then we'll look at some

724
00:27:57,980 --> 00:27:59,740
that are maybe a little
bit more quantitative,

725
00:27:59,740 --> 00:28:02,020
which I think is really
going to be a good source

726
00:28:02,020 --> 00:28:03,920
of conversation in a moment.

727
00:28:03,920 --> 00:28:05,563
So freshness.

728
00:28:07,250 --> 00:28:09,080
I think we all know that Naples sap

729
00:28:09,080 --> 00:28:13,890
needs to be the most freshness
and the utmost quality.

730
00:28:13,890 --> 00:28:15,890
How that's evaluated and measured

731
00:28:15,890 --> 00:28:17,180
would need to be stipulated,

732
00:28:17,180 --> 00:28:19,800
would need to be clear between parties.

733
00:28:19,800 --> 00:28:24,620
Odors, cloudiness, sliminess,
funkiness, buddiness,

734
00:28:24,620 --> 00:28:26,720
I think we've heard these
terms thrown around.

735
00:28:26,720 --> 00:28:29,440
These are all things that
need to be factored in.

736
00:28:29,440 --> 00:28:32,240
Contamination or the
absence of contamination,

737
00:28:32,240 --> 00:28:33,530
really important for us to think about

738
00:28:33,530 --> 00:28:34,840
how would we identify that

739
00:28:34,840 --> 00:28:36,920
and how would both parties agree.

740
00:28:36,920 --> 00:28:38,580
In a minute here, we'll
get to the record section

741
00:28:38,580 --> 00:28:39,943
and the data preparation.

742
00:28:40,810 --> 00:28:43,530
But freshness has gotta be
super, super high on the list.

743
00:28:43,530 --> 00:28:45,750
And both parties need to
understand what that means.

744
00:28:45,750 --> 00:28:48,070
And I think have a
collective understanding

745
00:28:48,070 --> 00:28:49,993
of when it's not going to be met.

746
00:28:51,600 --> 00:28:53,000
Here's some measureables.

747
00:28:53,000 --> 00:28:55,160
I think we're clear that
this is already happening.

748
00:28:55,160 --> 00:28:56,630
This is data collection that's happening

749
00:28:56,630 --> 00:29:00,830
between sap buyers and sellers.

750
00:29:00,830 --> 00:29:03,210
Possible temperature upon
delivery could be relevant,

751
00:29:03,210 --> 00:29:05,410
especially if we're
talking about concentrate.

752
00:29:05,410 --> 00:29:07,340
We know that this becomes more perishable

753
00:29:07,340 --> 00:29:09,990
as we start to concentrate
into higher sugars.

754
00:29:09,990 --> 00:29:12,270
And especially if we
start to transport things,

755
00:29:12,270 --> 00:29:14,210
as we know from the milk
industry and cheese makers,

756
00:29:14,210 --> 00:29:17,040
the idea of agitation,
certainly as a factor with milk,

757
00:29:17,040 --> 00:29:19,770
I'm not so sure if it's going
to be a factor with sap,

758
00:29:19,770 --> 00:29:22,120
but temperature is on people's mind.

759
00:29:22,120 --> 00:29:25,140
Sugar content and Brix level
is definitely a measurable

760
00:29:25,140 --> 00:29:28,470
that's going to factor into
possibly performance criteria

761
00:29:28,470 --> 00:29:31,190
or possibly when the buyer
is no longer interested.

762
00:29:31,190 --> 00:29:34,713
If the saps sugar content
drops below a certain level.

763
00:29:35,640 --> 00:29:37,490
And of course the volume of delivery.

764
00:29:38,640 --> 00:29:41,160
So how many gallons are delivered

765
00:29:41,160 --> 00:29:43,140
is going to be something
that's easily measurable

766
00:29:43,140 --> 00:29:45,540
and something that's going
to easily be tracked.

767
00:29:48,510 --> 00:29:50,930
So the next performance
criteria potentially,

768
00:29:50,930 --> 00:29:53,200
depending on what the
relationship is for sap is,

769
00:29:53,200 --> 00:29:54,440
who's going to manage delivery.

770
00:29:54,440 --> 00:29:57,260
Is this a situation where
the buyer has the capacity

771
00:29:57,260 --> 00:29:59,840
and has the trucking to
go around and collect sap,

772
00:29:59,840 --> 00:30:02,160
certainly could impact prices,

773
00:30:02,160 --> 00:30:04,520
or is it a situation where
the seller is responsible

774
00:30:04,520 --> 00:30:06,490
to get that sap delivered?

775
00:30:06,490 --> 00:30:08,020
And I'm sure you've all heard it.

776
00:30:08,020 --> 00:30:10,320
And I've heard everything
from delivering on,

777
00:30:10,320 --> 00:30:12,420
behind tractors,
delivering informal trucks

778
00:30:12,420 --> 00:30:13,900
and some adjacent land owners

779
00:30:13,900 --> 00:30:16,612
that have the capacity to
pump and pump their sap

780
00:30:16,612 --> 00:30:20,910
over the hill or down
the terrain to the buyer.

781
00:30:20,910 --> 00:30:22,650
So there's all going to be options here,

782
00:30:22,650 --> 00:30:24,520
and I think it could be specified

783
00:30:24,520 --> 00:30:27,230
and will certainly have an
impact on possibly the pricing

784
00:30:27,230 --> 00:30:29,620
and how that part of
the relationship goes.

785
00:30:29,620 --> 00:30:31,880
I think a couple of
notables here for delivery,

786
00:30:31,880 --> 00:30:34,674
pumping and tanks.

787
00:30:34,674 --> 00:30:37,220
I think you can all imagine
the different bottlenecks,

788
00:30:37,220 --> 00:30:40,180
the potential of equipment
working or not working.

789
00:30:40,180 --> 00:30:42,540
The potential of tank storage being there

790
00:30:42,540 --> 00:30:44,350
or being over full.

791
00:30:44,350 --> 00:30:48,723
And so these are factors that
I'd encourage to be included.

792
00:30:51,590 --> 00:30:52,850
I've only got a few more slides here.

793
00:30:52,850 --> 00:30:54,870
So I just want to remind
you if you've got questions,

794
00:30:54,870 --> 00:30:56,830
feel free to type them into the chat.

795
00:30:56,830 --> 00:30:58,710
We'll go through them in a few minutes.

796
00:30:58,710 --> 00:31:02,400
And then we'll also probably
be able to open up the mics

797
00:31:02,400 --> 00:31:04,680
for Q and A in a couple more slides here.

798
00:31:04,680 --> 00:31:06,713
So performance criteria delivery.

799
00:31:08,560 --> 00:31:10,170
Okay, data and inspection.

800
00:31:10,170 --> 00:31:12,400
So another basic to contracts and basic

801
00:31:12,400 --> 00:31:13,830
to business to business relationship

802
00:31:13,830 --> 00:31:16,640
is establishing a receiving procedure,

803
00:31:16,640 --> 00:31:18,670
obviously establishing the paperwork

804
00:31:18,670 --> 00:31:21,720
that would be transferred upon receipt.

805
00:31:21,720 --> 00:31:22,597
So who would receive it

806
00:31:22,597 --> 00:31:25,550
and when it's receiving time
appropriate, inappropriate?

807
00:31:25,550 --> 00:31:27,590
What's the inspection process?

808
00:31:27,590 --> 00:31:31,250
And then definitely in
any formal contract,

809
00:31:31,250 --> 00:31:34,220
there will be some clarity
on how the rejection

810
00:31:34,220 --> 00:31:35,710
would be dealt out

811
00:31:35,710 --> 00:31:37,820
and what the timing of
the rejection would be

812
00:31:37,820 --> 00:31:41,470
if the product, again, didn't
meet the performance criteria.

813
00:31:41,470 --> 00:31:44,020
So these are really now
we get to the point of

814
00:31:44,020 --> 00:31:46,420
what if this situation is not working.

815
00:31:46,420 --> 00:31:50,870
The baseline contract hopefully
has spelled out these steps,

816
00:31:50,870 --> 00:31:53,350
so someone can understand,
oh, if it's not,

817
00:31:53,350 --> 00:31:55,060
it's not going to meet the test.

818
00:31:55,060 --> 00:31:56,800
I'm going to know at this point

819
00:31:56,800 --> 00:31:58,610
versus maybe weeks down the road

820
00:31:58,610 --> 00:32:03,210
and managing that part of
the unfortunate situation.

821
00:32:03,210 --> 00:32:04,610
Some basic data and records, right?

822
00:32:04,610 --> 00:32:08,510
Proof of delivery, date and
time, we mentioned Brix.

823
00:32:08,510 --> 00:32:09,950
We mentioned volume,

824
00:32:09,950 --> 00:32:12,660
just a question volume in the
tank, volume via the meter.

825
00:32:12,660 --> 00:32:15,057
Is there any major loss
via the pump process

826
00:32:15,057 --> 00:32:16,680
and the tubing process?

827
00:32:16,680 --> 00:32:18,580
I don't know if it's consequential or not,

828
00:32:18,580 --> 00:32:20,230
but something to think about.

829
00:32:20,230 --> 00:32:22,640
And again, that qualitative assessment,

830
00:32:22,640 --> 00:32:24,310
I'm not exactly sure how
that's going to be done

831
00:32:24,310 --> 00:32:27,430
as a non-maple specialist,
just as a business person.

832
00:32:27,430 --> 00:32:29,820
So I'd love to get people's
feedback when we talk about

833
00:32:29,820 --> 00:32:30,653
what are the ways

834
00:32:30,653 --> 00:32:33,660
that we can collectively
understand the vocabulary

835
00:32:33,660 --> 00:32:37,190
for that qualitative
assessment of freshness

836
00:32:37,190 --> 00:32:38,440
or the nature of the sap.

837
00:32:40,520 --> 00:32:42,380
So moving on from data and inspection,

838
00:32:42,380 --> 00:32:44,613
just now pricing and payment.

839
00:32:46,300 --> 00:32:49,290
Again, you could stipulate a
price in a binding contract.

840
00:32:49,290 --> 00:32:52,080
You can also stipulate a
reference point, which is fair.

841
00:32:52,080 --> 00:32:53,040
So on the right-hand side,

842
00:32:53,040 --> 00:32:56,270
you can see an example of a
card that we produce at UVM here

843
00:32:56,270 --> 00:33:00,430
with a basic sap price
value based on sugar content

844
00:33:00,430 --> 00:33:02,900
and based on market price.

845
00:33:02,900 --> 00:33:05,930
So I think this is something
that can be discussed.

846
00:33:05,930 --> 00:33:08,260
What is the market price reference,

847
00:33:08,260 --> 00:33:09,560
couple of different options out there.

848
00:33:09,560 --> 00:33:10,393
If you're not familiar,

849
00:33:10,393 --> 00:33:13,010
Cornell has been publishing
sap price tables for years.

850
00:33:13,010 --> 00:33:14,680
UVM, we've now got a couple posted

851
00:33:14,680 --> 00:33:16,840
or one posted at maplemanager.org.

852
00:33:16,840 --> 00:33:18,340
I've also seen a few others online.

853
00:33:18,340 --> 00:33:19,550
So there are reference points

854
00:33:19,550 --> 00:33:24,550
that do the quantitative math
between the market price,

855
00:33:24,710 --> 00:33:25,830
the sweetness of the sap

856
00:33:25,830 --> 00:33:29,300
and then how much value and
syrup there could be there.

857
00:33:29,300 --> 00:33:32,600
Generally, what we've seen
in a sap sales agreement

858
00:33:32,600 --> 00:33:33,950
is regional in nature.

859
00:33:33,950 --> 00:33:37,970
Anywhere from 50% to 70%
can go to the sap seller.

860
00:33:37,970 --> 00:33:40,520
And that's 50% of the final syrup value

861
00:33:40,520 --> 00:33:42,410
going through those calculations.

862
00:33:42,410 --> 00:33:44,060
And then deciding the percentage that goes

863
00:33:44,060 --> 00:33:45,360
to the sap seller.

864
00:33:45,360 --> 00:33:47,740
In more competitive maple
regions like Northern Vermont,

865
00:33:47,740 --> 00:33:49,440
we certainly see 65%.

866
00:33:49,440 --> 00:33:51,987
Sometimes you hear 70% goes to the seller.

867
00:33:51,987 --> 00:33:53,470
And I think that's a function

868
00:33:53,470 --> 00:33:55,890
of very specialized processing facilities

869
00:33:55,890 --> 00:33:57,710
where they really have
their production costs

870
00:33:57,710 --> 00:33:59,930
and their variable costs are lower.

871
00:33:59,930 --> 00:34:02,730
And the input is going to be
where they put their money

872
00:34:02,730 --> 00:34:03,950
in other regions.

873
00:34:03,950 --> 00:34:06,180
Definitely we see, and we've
seen this from survey work,

874
00:34:06,180 --> 00:34:09,023
more 50% sap share to the seller.

875
00:34:09,930 --> 00:34:12,000
Another factor here is grade and price.

876
00:34:12,000 --> 00:34:13,060
Remember the sap seller,

877
00:34:13,060 --> 00:34:15,140
once that sap comes out,
it goes out of your hands.

878
00:34:15,140 --> 00:34:17,870
And it goes into the
hands of the processor.

879
00:34:17,870 --> 00:34:21,310
Now you're actually out of
control of what the final grade

880
00:34:21,310 --> 00:34:22,690
of the syrup will be.

881
00:34:22,690 --> 00:34:25,750
In some cases, the grade
will dictate the price.

882
00:34:25,750 --> 00:34:27,520
And that is a feature
that I think is relevant

883
00:34:27,520 --> 00:34:28,900
in some agreements.

884
00:34:28,900 --> 00:34:33,300
If there's an ability to know
in advance that the processor

885
00:34:33,300 --> 00:34:35,360
is going to be getting
paid a different price

886
00:34:35,360 --> 00:34:37,090
for different grades of syrup

887
00:34:37,090 --> 00:34:38,890
that may need to be featured into the,

888
00:34:38,890 --> 00:34:40,340
or factored into the pricing.

889
00:34:41,760 --> 00:34:44,110
And I understand that
could be tough to predict

890
00:34:44,110 --> 00:34:46,360
given the nuances of syrup processing

891
00:34:46,360 --> 00:34:49,790
and also the factor of sap quality.

892
00:34:49,790 --> 00:34:51,810
But again, let's try to figure this out

893
00:34:51,810 --> 00:34:53,210
and discuss it with your
parties ahead of time.

894
00:34:53,210 --> 00:34:55,490
So if a disagreement were to occur,

895
00:34:55,490 --> 00:34:59,003
we at least have some familiarity
with what the thinking is.

896
00:35:00,870 --> 00:35:02,470
Okay, finally here for our specifics,

897
00:35:02,470 --> 00:35:04,570
without getting into
the real legalese here.

898
00:35:04,570 --> 00:35:07,460
Timing, what are you looking for?

899
00:35:07,460 --> 00:35:09,040
Are you looking for cash on delivery?

900
00:35:09,040 --> 00:35:12,620
Can you realistically
expect cash on delivery?

901
00:35:12,620 --> 00:35:13,610
If you're a sap seller,

902
00:35:13,610 --> 00:35:14,640
you're looking for payment

903
00:35:14,640 --> 00:35:16,840
at the end of the production season.

904
00:35:16,840 --> 00:35:19,150
And let's face it, if you're a processor,

905
00:35:19,150 --> 00:35:21,270
are you looking to pay someone
right when you've collected

906
00:35:21,270 --> 00:35:22,470
all the sap and made the syrup,

907
00:35:22,470 --> 00:35:24,610
or are you hoping to maybe
have some leeway there

908
00:35:24,610 --> 00:35:27,470
and pay people for sap

909
00:35:27,470 --> 00:35:30,830
at some point later when that
inventory is getting sold?

910
00:35:30,830 --> 00:35:33,010
These are things that are
definitely worth considering,

911
00:35:33,010 --> 00:35:34,890
and whether it's sap or finished syrup.

912
00:35:34,890 --> 00:35:37,960
I think we need to understand
the inventory lag time

913
00:35:37,960 --> 00:35:41,280
with the processor and the
seller is potentially significant

914
00:35:41,280 --> 00:35:42,820
and both parties are going to want

915
00:35:42,820 --> 00:35:44,270
to work that out well in advance

916
00:35:44,270 --> 00:35:46,573
and hopefully find some agreement.

917
00:35:48,590 --> 00:35:51,580
So I honestly could not get
into the specifics tonight

918
00:35:51,580 --> 00:35:53,700
on some of those legal
details of the breaches.

919
00:35:53,700 --> 00:35:55,550
And I will just say that

920
00:35:55,550 --> 00:35:57,140
when we get our templates more formalized,

921
00:35:57,140 --> 00:35:58,870
we're going to have a lot
more information there.

922
00:35:58,870 --> 00:36:00,890
It doesn't mean we can't talk about it,

923
00:36:00,890 --> 00:36:02,610
but I'm going to stop there
with some of the things

924
00:36:02,610 --> 00:36:04,430
that were at least within my wheelhouse.

925
00:36:04,430 --> 00:36:05,650
And at this point,

926
00:36:05,650 --> 00:36:08,423
really like to open it
up for conversation.

927
00:36:09,430 --> 00:36:12,990
We can in a second unlock you
so you can ask some questions

928
00:36:12,990 --> 00:36:16,380
out loud, and if you've got
anything you'd prefer to type,

929
00:36:16,380 --> 00:36:18,433
definitely type into the chat box,

930
00:36:19,890 --> 00:36:20,723
I'm going to leave it to you.

931
00:36:20,723 --> 00:36:22,230
I think you can all think of a few things

932
00:36:22,230 --> 00:36:23,740
that could go wrong that I didn't mention.

933
00:36:23,740 --> 00:36:26,340
So, if you've got some
ideas of what could go wrong

934
00:36:26,340 --> 00:36:29,860
or what things you may want
to protect yourself from,

935
00:36:29,860 --> 00:36:31,723
I'll wait and please chime in.

936
00:36:33,520 --> 00:36:37,160
- [Mark] Everyone should be
able to unmute at this point.

937
00:36:37,160 --> 00:36:37,993
- Great, thanks Mark.

938
00:36:37,993 --> 00:36:40,440
So if you want to unmute
yourself, you can do it.

939
00:36:40,440 --> 00:36:41,880
You just manually go up to the top ribbon

940
00:36:41,880 --> 00:36:46,720
and hoping to see some questions.

941
00:36:46,720 --> 00:36:48,360
And also just some conversation here.

942
00:36:48,360 --> 00:36:50,390
Cause it looks like almost half of you

943
00:36:50,390 --> 00:36:52,640
would like to get into
some legal agreements.

944
00:36:54,200 --> 00:36:56,270
- [Mark] While people are
thinking about their questions,

945
00:36:56,270 --> 00:36:59,010
Mark, I'll just jump in.

946
00:36:59,010 --> 00:37:00,160
It was great, I really,

947
00:37:01,040 --> 00:37:03,010
so things you just don't
think about, you know,

948
00:37:03,010 --> 00:37:05,800
especially with something
as traditional as maple,

949
00:37:05,800 --> 00:37:09,390
where there's a long, long
history of handshake deals,

950
00:37:09,390 --> 00:37:13,670
you know, one thing that
I think the maple industry

951
00:37:13,670 --> 00:37:18,410
is a little behind in is the
instrumentation for measuring,

952
00:37:18,410 --> 00:37:20,960
especially when you talk
about like a sap purchase.

953
00:37:22,640 --> 00:37:26,650
There is not a established requirement

954
00:37:26,650 --> 00:37:31,650
for using a certified meter
for measuring gallons of sap.

955
00:37:34,110 --> 00:37:36,850
A lot of people will use
something as inaccurate

956
00:37:36,850 --> 00:37:41,850
as how full is their 500 gallon poly tank

957
00:37:42,970 --> 00:37:46,180
that, you know, is a
nominally 500 gallon tank.

958
00:37:46,180 --> 00:37:47,730
Some people will just eyeball it.

959
00:37:47,730 --> 00:37:49,340
Some people will use a flow meter,

960
00:37:49,340 --> 00:37:51,930
but they can have a
pretty high error rate.

961
00:37:51,930 --> 00:37:56,930
So I think in a sap only contract,

962
00:37:57,460 --> 00:37:59,280
it might be good to explicitly state.

963
00:37:59,280 --> 00:38:01,860
How are you going to
define how many gallons

964
00:38:03,370 --> 00:38:05,040
are changing hands?

965
00:38:05,040 --> 00:38:08,630
And the same goes for sap
concentration, you know.

966
00:38:09,700 --> 00:38:11,805
In Vermont, sap hydrometers

967
00:38:11,805 --> 00:38:15,690
are actually individually numbered.

968
00:38:15,690 --> 00:38:18,180
They are traceable to a standard

969
00:38:18,180 --> 00:38:22,143
that assuming it went through
the state of Vermont lab,

970
00:38:23,010 --> 00:38:25,620
it's not true for hydro,
for syrup hydrometer.

971
00:38:25,620 --> 00:38:29,940
So there's definitely some
issues there with defining

972
00:38:29,940 --> 00:38:32,593
what the product being exchanged is.

973
00:38:33,834 --> 00:38:36,490
And it would probably be
good have that in, you know,

974
00:38:36,490 --> 00:38:37,403
in a contract.

975
00:38:38,830 --> 00:38:42,103
Alright, anyone else have
questions or comments?

976
00:38:46,390 --> 00:38:47,223
Oh, I see.

977
00:38:47,223 --> 00:38:48,173
I see in the chat.

978
00:38:50,270 --> 00:38:55,270
Yeah, April we've actually
updated the sugar bush lease.

979
00:38:55,740 --> 00:38:57,763
It's on maplemanager.org.

980
00:38:58,960 --> 00:39:00,973
I can actually put a link in the chat,

981
00:39:01,950 --> 00:39:03,710
well I did earlier for maple manager.

982
00:39:03,710 --> 00:39:06,570
But if you go there the first time,

983
00:39:06,570 --> 00:39:11,440
you might have to go
through a very minor survey.

984
00:39:11,440 --> 00:39:13,950
It's like a very, take you a minute to do,

985
00:39:13,950 --> 00:39:18,020
and then you'll be able to
have access to that new updated

986
00:39:18,020 --> 00:39:19,942
sugar bush lease as well as the guide

987
00:39:19,942 --> 00:39:21,503
to kind of explain the parts.

988
00:39:22,520 --> 00:39:27,477
- [April] Perfect, I think
that if I can make a comment.

989
00:39:27,477 --> 00:39:31,020
I would really like to
comment on something

990
00:39:31,020 --> 00:39:33,230
that has impacted us in a big way.

991
00:39:33,230 --> 00:39:36,530
And it's something that
you don't ever expect.

992
00:39:36,530 --> 00:39:41,530
It's, without having these
legal agreements in place,

993
00:39:43,210 --> 00:39:45,373
if there is a death in the family,

994
00:39:47,730 --> 00:39:52,730
it's ridiculously hard to fix things.

995
00:39:56,190 --> 00:39:58,763
So the more agreements that there are,

996
00:39:58,763 --> 00:40:02,920
that are in place for any landowner,

997
00:40:02,920 --> 00:40:04,603
whether you're young or old,

998
00:40:07,211 --> 00:40:09,520
I can only encourage people to do it

999
00:40:09,520 --> 00:40:13,200
so that they don't end up in court

1000
00:40:13,200 --> 00:40:15,033
for as long as we've been there.

1001
00:40:16,410 --> 00:40:18,700
- Yeah, April, I appreciate
you making that comment

1002
00:40:18,700 --> 00:40:19,610
and my heart goes out to you.

1003
00:40:19,610 --> 00:40:22,300
Cause it sounds like it's
from personal experience.

1004
00:40:22,300 --> 00:40:25,340
And I think that is the difficult reality

1005
00:40:25,340 --> 00:40:27,140
of obviously doing a program like this

1006
00:40:27,140 --> 00:40:30,530
and thinking about this
is that we certainly hope

1007
00:40:30,530 --> 00:40:33,530
that things go well and that
no one has any problems.

1008
00:40:33,530 --> 00:40:36,430
And eight out of ten
times in relationships

1009
00:40:36,430 --> 00:40:38,230
things can go well, but
it's those two out of ten,

1010
00:40:38,230 --> 00:40:42,233
when something goes wrong
and often very unexpected,

1011
00:40:43,380 --> 00:40:46,330
it's very helpful and often
necessary to have something

1012
00:40:46,330 --> 00:40:50,320
to refer to and say, this
is how we deal with it.

1013
00:40:50,320 --> 00:40:54,810
And I don't actually,
going back to the lease,

1014
00:40:54,810 --> 00:40:57,450
you mentioned the old
version from UVM extension

1015
00:40:57,450 --> 00:40:58,283
and Larry, Maya.

1016
00:40:58,283 --> 00:41:00,950
I have to re-look at that
to see what we added,

1017
00:41:00,950 --> 00:41:01,783
but I could tell you,

1018
00:41:01,783 --> 00:41:04,420
I'm pretty sure we added quite
a bit to the lease template.

1019
00:41:04,420 --> 00:41:07,370
And we also annotated
some different features

1020
00:41:07,370 --> 00:41:11,150
and the, you know, a common
feature in a lease agreement

1021
00:41:11,150 --> 00:41:12,840
would be the assignment to errors.

1022
00:41:12,840 --> 00:41:17,840
And if you know, boilerplate
legal document would spell out

1023
00:41:18,200 --> 00:41:19,630
and should be discussed, you know,

1024
00:41:19,630 --> 00:41:22,120
how the relationship transfers

1025
00:41:22,120 --> 00:41:27,120
if a certain member passes
away, if there's a divorce,

1026
00:41:27,120 --> 00:41:28,563
if there's a disability.

1027
00:41:29,670 --> 00:41:32,890
Yeah, tough situation,
tough enough already

1028
00:41:32,890 --> 00:41:34,010
to be in those situations

1029
00:41:34,010 --> 00:41:37,370
and even more difficult
to have court dealings

1030
00:41:37,370 --> 00:41:38,700
to resolve them.

1031
00:41:38,700 --> 00:41:41,800
- [April] I would not encourage anybody

1032
00:41:41,800 --> 00:41:44,183
to alter these boilerplates

1033
00:41:45,240 --> 00:41:50,050
and consider them gospel
until they had been gone over

1034
00:41:50,050 --> 00:41:51,143
by an attorney.

1035
00:41:52,810 --> 00:41:55,863
Because there's too many
things that people can change.

1036
00:41:56,750 --> 00:41:58,590
One single word,

1037
00:41:58,590 --> 00:42:02,983
it doesn't seem that important
can change everything.

1038
00:42:06,090 --> 00:42:09,290
- Yeah agreed, agreed.

1039
00:42:09,290 --> 00:42:11,650
Yep, good reminder and we try to indicate

1040
00:42:11,650 --> 00:42:13,300
that these are educational resources.

1041
00:42:13,300 --> 00:42:14,133
And like we said,

1042
00:42:14,133 --> 00:42:15,450
we're getting you to
think about these things,

1043
00:42:15,450 --> 00:42:19,060
but you've got everyone on
this call and when it pulls,

1044
00:42:19,060 --> 00:42:20,730
these templates has
their own legwork to do,

1045
00:42:20,730 --> 00:42:22,760
to not just get them completed,

1046
00:42:22,760 --> 00:42:25,283
but to understand really what it means.

1047
00:42:26,310 --> 00:42:27,253
Thanks April.

1048
00:42:28,490 --> 00:42:30,730
Mark, you mentioned
instrumentation which was great.

1049
00:42:30,730 --> 00:42:33,770
I mean, who else has situations feel free,

1050
00:42:33,770 --> 00:42:36,530
you know, maybe share in the chat box,

1051
00:42:36,530 --> 00:42:38,190
something that hasn't happened to you

1052
00:42:38,190 --> 00:42:40,900
or something that you
could consider going wrong

1053
00:42:40,900 --> 00:42:42,520
for somebody else.

1054
00:42:42,520 --> 00:42:43,660
We'd certainly appreciate it

1055
00:42:43,660 --> 00:42:45,160
because we're going to
be working with attorneys

1056
00:42:45,160 --> 00:42:46,330
to draft new templates.

1057
00:42:46,330 --> 00:42:47,192
And as always the templates we've seen

1058
00:42:47,192 --> 00:42:50,240
from 10 or 15 years ago

1059
00:42:50,240 --> 00:42:52,790
just don't feel like they've
got enough guts in them.

1060
00:42:52,790 --> 00:42:54,800
So we want to step them up

1061
00:42:54,800 --> 00:42:57,400
and make sure people can
see the different features.

1062
00:42:58,920 --> 00:42:59,870
I can fill the air.

1063
00:42:59,870 --> 00:43:01,820
Well, you know, certainly
chime in if someone wants

1064
00:43:01,820 --> 00:43:02,910
to say anything,

1065
00:43:02,910 --> 00:43:04,480
but if you're typing one thing,

1066
00:43:04,480 --> 00:43:08,570
I'll note from looking at the contract law

1067
00:43:08,570 --> 00:43:09,900
and contract guidance,

1068
00:43:09,900 --> 00:43:12,020
when you get into the idea
of a breach of contract,

1069
00:43:12,020 --> 00:43:14,400
I think it's good to recognize that

1070
00:43:14,400 --> 00:43:16,300
there really isn't an
intention for the contract

1071
00:43:16,300 --> 00:43:18,490
to penalize the person
that didn't deliver.

1072
00:43:18,490 --> 00:43:21,290
The person that left the
agreement unfulfilled.

1073
00:43:21,290 --> 00:43:23,350
So it's not necessarily
to create a consequence

1074
00:43:23,350 --> 00:43:26,160
or a penalty, but it's
often the essence is

1075
00:43:26,160 --> 00:43:29,640
to make the person who
was injured whole again.

1076
00:43:29,640 --> 00:43:34,620
So if in a case where there's
a syrup processor that did not

1077
00:43:34,620 --> 00:43:37,820
receive all the sap,
they were hoping to get,

1078
00:43:37,820 --> 00:43:40,770
we're not going to
penalize the sap producer

1079
00:43:40,770 --> 00:43:41,960
to show them they did something wrong,

1080
00:43:41,960 --> 00:43:46,940
but there is a process ideally
to look to see what was

1081
00:43:46,940 --> 00:43:48,620
missed by the syrup processor,

1082
00:43:48,620 --> 00:43:51,930
by not receiving that input
and then putting the magnitude

1083
00:43:51,930 --> 00:43:53,863
on that to make them whole again.

1084
00:43:55,130 --> 00:43:55,963
So I guess,

1085
00:43:55,963 --> 00:43:56,943
just to kind of a way to think about it

1086
00:43:56,943 --> 00:44:00,780
as that not to be adversarial
or a slap on the wrist,

1087
00:44:00,780 --> 00:44:02,350
it's really to make sure
that the person that,

1088
00:44:02,350 --> 00:44:05,100
again has the risk can find a way

1089
00:44:05,100 --> 00:44:06,550
to bring themselves to whole.

1090
00:44:10,659 --> 00:44:13,110
- You know, Mark, we focused mostly on,

1091
00:44:13,110 --> 00:44:17,420
on talking about sap purchases
and April brought up the idea

1092
00:44:17,420 --> 00:44:18,943
of a sugar bush lease.

1093
00:44:19,950 --> 00:44:23,340
And you did have a point
about tubing installers.

1094
00:44:23,340 --> 00:44:26,190
You know, there are
definitely plenty of stories

1095
00:44:26,190 --> 00:44:29,160
of people hiring someone
to do an installation

1096
00:44:29,160 --> 00:44:32,730
with essentially a, I guess,

1097
00:44:32,730 --> 00:44:34,530
of what the tap count is going to be.

1098
00:44:34,530 --> 00:44:37,950
And no one's going to go and
do a hundred percent survey

1099
00:44:37,950 --> 00:44:40,860
of how many tappable trees
and then do the installation.

1100
00:44:40,860 --> 00:44:42,880
So it's got to be an estimate,

1101
00:44:42,880 --> 00:44:46,100
but I could see room in a
contract so that, you know,

1102
00:44:46,100 --> 00:44:50,970
you're within some reasonable
amount of the estimate.

1103
00:44:50,970 --> 00:44:53,380
And so it's not way under, way over.

1104
00:44:53,380 --> 00:44:57,230
And even which trees are
getting taps, being really,

1105
00:44:57,230 --> 00:45:00,290
really clear about what
that minimum size is.

1106
00:45:00,290 --> 00:45:02,030
Not only from a production standpoint,

1107
00:45:02,030 --> 00:45:05,190
because it's such a linear
relationship between tree size

1108
00:45:05,190 --> 00:45:06,390
and yield.

1109
00:45:06,390 --> 00:45:08,200
You don't want to pay for 20,000 taps,

1110
00:45:08,200 --> 00:45:11,650
but only functionally
have 10,000 taps worth

1111
00:45:11,650 --> 00:45:15,730
of conductive wood
that's being tapped into.

1112
00:45:15,730 --> 00:45:18,370
But also just, you know,

1113
00:45:18,370 --> 00:45:22,660
if you're in an agreement
like current use in Vermont

1114
00:45:22,660 --> 00:45:24,990
or some other tax abatement program

1115
00:45:24,990 --> 00:45:26,480
or certified organic

1116
00:45:26,480 --> 00:45:29,300
where you're legally bound

1117
00:45:29,300 --> 00:45:32,260
to a standard of a minimum tapping,

1118
00:45:32,260 --> 00:45:34,360
you want to make sure you're
not paying for something

1119
00:45:34,360 --> 00:45:37,610
that is going to put you at risk

1120
00:45:37,610 --> 00:45:39,010
of violating that agreement.

1121
00:45:41,450 --> 00:45:42,283
- Yeah, agreed.

1122
00:45:42,283 --> 00:45:43,120
And you hit the forestry side.

1123
00:45:43,120 --> 00:45:45,180
I was also thinking about
just other regulations

1124
00:45:45,180 --> 00:45:47,530
and you all probably know your domains,

1125
00:45:47,530 --> 00:45:48,430
know well enough to know

1126
00:45:48,430 --> 00:45:51,773
if you have water quality
situations like we do in Vermont,

1127
00:45:52,630 --> 00:45:55,350
potentially wetlands or
protected land features

1128
00:45:55,350 --> 00:45:56,690
that could be impacted by something

1129
00:45:56,690 --> 00:45:58,053
like a tubing installation.

1130
00:45:59,230 --> 00:46:01,940
Then we get into the sticky
situation of who's liable.

1131
00:46:01,940 --> 00:46:03,498
Is the land owner liable

1132
00:46:03,498 --> 00:46:06,303
and/or is it the installer that's liable?

1133
00:46:07,660 --> 00:46:08,890
Certainly no one wants to go there,

1134
00:46:08,890 --> 00:46:12,040
but it's good to lay that type
type of worst case scenario

1135
00:46:12,040 --> 00:46:12,973
out ahead of time.

1136
00:46:15,560 --> 00:46:18,830
- [April] Has there been any
change in the new contract

1137
00:46:18,830 --> 00:46:20,949
from the old one?

1138
00:46:20,949 --> 00:46:24,030
Larry Maya put together to the new one

1139
00:46:24,030 --> 00:46:27,890
that you guys are working
on that addresses waste

1140
00:46:29,960 --> 00:46:34,120
and tubing garbage and that kind of stuff

1141
00:46:34,120 --> 00:46:36,340
being left in the woods?

1142
00:46:36,340 --> 00:46:38,450
- Yeah, great question.

1143
00:46:38,450 --> 00:46:39,630
I don't know if that was covered

1144
00:46:39,630 --> 00:46:41,920
in the prior sugar bush lease,

1145
00:46:41,920 --> 00:46:45,030
but I do know that we annotated that,

1146
00:46:45,030 --> 00:46:46,250
Mark, you can chime in here.

1147
00:46:46,250 --> 00:46:48,130
I'm pretty clear that we annotated,

1148
00:46:48,130 --> 00:46:49,860
I don't know if we provided
boilerplate language,

1149
00:46:49,860 --> 00:46:52,930
but we certainly talked a lot
about that feature of cleanup

1150
00:46:52,930 --> 00:46:56,170
and disposal in our conversations.

1151
00:46:56,170 --> 00:46:57,470
Pretty sure it's in there.

1152
00:47:00,390 --> 00:47:01,640
Looks like Mark's scanning.

1153
00:47:01,640 --> 00:47:04,170
- Yeah, I'm just going
to try to look at it.

1154
00:47:04,170 --> 00:47:05,640
Off the top of my head, I can't remember,

1155
00:47:05,640 --> 00:47:09,270
but I believe there is some
sort of performance about

1156
00:47:09,270 --> 00:47:14,270
not leaving debris, but I would
have to, I'd have to look,

1157
00:47:14,560 --> 00:47:15,923
look back and make sure.

1158
00:47:16,810 --> 00:47:17,754
- Yeah, that's a great point.

1159
00:47:17,754 --> 00:47:20,070
- And April that's a really good point

1160
00:47:20,070 --> 00:47:23,870
because by some estimates
taking tubing out

1161
00:47:23,870 --> 00:47:25,780
and disposing that either in landfill

1162
00:47:25,780 --> 00:47:28,790
or if you're lucky enough
to be near where tubing

1163
00:47:28,790 --> 00:47:30,200
is able to be recycled,

1164
00:47:30,200 --> 00:47:33,020
that can cost almost as
much as the installation

1165
00:47:33,020 --> 00:47:34,100
in the first place.

1166
00:47:34,100 --> 00:47:39,100
So, it's not an insignificant
cost taking tubing out.

1167
00:47:43,040 --> 00:47:46,930
- [April] Even just the drops
being left on the ground

1168
00:47:46,930 --> 00:47:51,130
and just general trash being left there

1169
00:47:51,130 --> 00:47:52,687
by people working in the woods.

1170
00:47:52,687 --> 00:47:55,860
And that kind of thing,
if you're a landowner,

1171
00:47:55,860 --> 00:48:00,349
you know, it's something
that should be addressed

1172
00:48:00,349 --> 00:48:02,750
in a contract like that,

1173
00:48:02,750 --> 00:48:05,123
what the expectation is.

1174
00:48:07,520 --> 00:48:12,520
The other major suggestion that
I have is it's very helpful

1175
00:48:13,630 --> 00:48:16,310
if you do accomplish
one of these agreements

1176
00:48:16,310 --> 00:48:20,130
and they're signed, to file
them with the town clerk,

1177
00:48:20,130 --> 00:48:23,560
they should be filed with
the town clerk anyway.

1178
00:48:23,560 --> 00:48:27,533
But if something bad happens,

1179
00:48:29,050 --> 00:48:31,020
having these lease agreements

1180
00:48:31,020 --> 00:48:35,923
so that everybody understands
what the transition is,

1181
00:48:38,040 --> 00:48:40,173
it's extremely important.

1182
00:48:43,560 --> 00:48:45,323
- Yeah, that's a good point.

1183
00:48:47,373 --> 00:48:50,010
April, I was able to find
the language we have.

1184
00:48:50,010 --> 00:48:55,010
So it's the one thing I can
tell you is it's much longer.

1185
00:48:55,110 --> 00:48:58,920
So the new sugar bush lease agreement,

1186
00:48:58,920 --> 00:49:00,250
it was 12 pages.

1187
00:49:00,250 --> 00:49:04,750
And we do have a segment
it's in section five

1188
00:49:04,750 --> 00:49:07,670
that says the leasee
shall keep the ground free

1189
00:49:07,670 --> 00:49:10,070
of scrap tubing, wire or other trash

1190
00:49:10,070 --> 00:49:11,450
throughout the lease period.

1191
00:49:11,450 --> 00:49:14,670
And she'll set no fires upon the premises.

1192
00:49:14,670 --> 00:49:17,180
And there's also a section about complying

1193
00:49:17,180 --> 00:49:19,810
with federal, state and local laws,

1194
00:49:19,810 --> 00:49:21,833
regulations and ordinances,

1195
00:49:22,740 --> 00:49:26,370
which references the use
value of pay appraisal program

1196
00:49:26,370 --> 00:49:29,900
in Vermont, wetlands
rules, that sort of thing.

1197
00:49:29,900 --> 00:49:31,217
And you might, if you're
in a different state,

1198
00:49:31,217 --> 00:49:35,610
you would probably want
to swap out your state

1199
00:49:35,610 --> 00:49:38,720
or municipal regulations there.

1200
00:49:38,720 --> 00:49:41,140
- I got a kind of question
in the chat there,

1201
00:49:41,140 --> 00:49:42,610
is there a link to the sample contract?

1202
00:49:42,610 --> 00:49:43,470
And just to be clear,

1203
00:49:43,470 --> 00:49:45,780
we're kind of talking about a
couple of different project.

1204
00:49:45,780 --> 00:49:48,260
Well, a couple of
different legal documents.

1205
00:49:48,260 --> 00:49:52,090
We can put the link back in
for the sugar bush lease.

1206
00:49:52,090 --> 00:49:54,720
And we also have a sugar house.

1207
00:49:54,720 --> 00:49:57,713
I believe it's at least I can't
remember if it's a license,

1208
00:49:58,700 --> 00:50:01,120
we've got two agreements that
are already published online

1209
00:50:01,120 --> 00:50:02,850
for sugar bush, and sugar house.

1210
00:50:02,850 --> 00:50:05,470
And then this, these templates
for binding contracts,

1211
00:50:05,470 --> 00:50:07,860
which would be a sap
purchase and sale agreement

1212
00:50:07,860 --> 00:50:09,560
has not been developed yet.

1213
00:50:09,560 --> 00:50:12,510
So that will go to maplemanager.org,

1214
00:50:12,510 --> 00:50:15,030
probably December, maybe
January at the latest.

1215
00:50:15,030 --> 00:50:17,780
And then we'll also be looking
at a syrup purchase and sale

1216
00:50:17,780 --> 00:50:19,520
contract template as well.

1217
00:50:19,520 --> 00:50:21,163
So those are not yet posted.

1218
00:50:23,440 --> 00:50:26,403
- So I just dropped a link
to the sugar bush lease.

1219
00:50:28,350 --> 00:50:29,183
That's the,

1220
00:50:31,677 --> 00:50:34,083
the one with annotations.

1221
00:50:35,370 --> 00:50:38,630
- Have any more questions or comments

1222
00:50:40,810 --> 00:50:42,373
before we wrap up tonight?

1223
00:50:44,020 --> 00:50:48,860
Okay, well I'm reading that one.

1224
00:50:48,860 --> 00:50:49,960
I'll read it out loud.

1225
00:50:51,090 --> 00:50:51,923
Good question here.

1226
00:50:51,923 --> 00:50:54,250
Are there any state laws that would ensure

1227
00:50:54,250 --> 00:50:58,340
that the land owner
would not be responsible

1228
00:50:58,340 --> 00:51:00,920
for cleaning up the sugar operation

1229
00:51:00,920 --> 00:51:03,663
if the operation ceases?

1230
00:51:07,050 --> 00:51:12,050
I am not exactly sure what the
state laws are, but this is,

1231
00:51:12,730 --> 00:51:14,840
well, it just make a segue here.

1232
00:51:14,840 --> 00:51:16,900
We've been working on
contracts for water quality

1233
00:51:16,900 --> 00:51:19,240
in relation to Vermont
water quality standards

1234
00:51:19,240 --> 00:51:21,970
on livestock farms and hayfields.

1235
00:51:21,970 --> 00:51:25,070
And this is something I'd have
to look up from our drafts

1236
00:51:25,070 --> 00:51:28,890
there, but we did go down
this road of liability

1237
00:51:28,890 --> 00:51:32,570
and indemnification of
who was going to end up,

1238
00:51:32,570 --> 00:51:34,550
especially if there's
a breach of state law,

1239
00:51:34,550 --> 00:51:36,223
who would be responsible.

1240
00:51:37,260 --> 00:51:39,423
I could probably,

1241
00:51:41,445 --> 00:51:43,995
I might be able to find
that link in a second here.

1242
00:51:45,550 --> 00:51:47,500
It's not specific to maple.

1243
00:51:47,500 --> 00:51:48,750
So I'm going to find that.

1244
00:51:48,750 --> 00:51:51,480
Mark, do you have any
comments on the cleaning

1245
00:51:51,480 --> 00:51:52,920
if there's any state regulations?

1246
00:51:52,920 --> 00:51:53,830
I'm going to guess no,

1247
00:51:53,830 --> 00:51:56,730
I think it's going to be
a unfortunate situation

1248
00:51:56,730 --> 00:52:00,220
for the land owner and then
potentially a liability

1249
00:52:00,220 --> 00:52:02,520
of the property were to
transition necessarily.

1250
00:52:02,520 --> 00:52:03,810
Not necessarily breaking the law,

1251
00:52:03,810 --> 00:52:06,410
but a potential liability
on the property value

1252
00:52:06,410 --> 00:52:09,663
if there's a whole bunch of
garbage there, without a doubt.

1253
00:52:10,750 --> 00:52:12,870
- [April] I think that
you would be talking

1254
00:52:12,870 --> 00:52:17,023
about a civil suit in that event.

1255
00:52:18,650 --> 00:52:22,030
If there was stuff left
there the only option

1256
00:52:22,030 --> 00:52:25,330
would be more likely than not a civil suit

1257
00:52:25,330 --> 00:52:27,040
against the renter

1258
00:52:30,080 --> 00:52:32,440
for the expenses of getting rid of it.

1259
00:52:32,440 --> 00:52:34,600
But you would still have to
deal with getting rid of it.

1260
00:52:34,600 --> 00:52:36,423
They wouldn't come back and do that.

1261
00:52:39,070 --> 00:52:43,033
If you guys want any input on
things that could go wrong,

1262
00:52:44,509 --> 00:52:45,653
I'm your girl.

1263
00:52:47,970 --> 00:52:49,073
- All right awesome.

1264
00:52:50,060 --> 00:52:50,893
April, if that's you,

1265
00:52:50,893 --> 00:52:52,400
if you could email,

1266
00:52:52,400 --> 00:52:54,080
my email is listed all
over our literature,

1267
00:52:54,080 --> 00:52:55,330
if you could email me,

1268
00:52:55,330 --> 00:52:56,330
we'd love to get your input

1269
00:52:56,330 --> 00:52:57,860
because we're going to
be drafting templates

1270
00:52:57,860 --> 00:52:59,500
and going through that, you know,

1271
00:52:59,500 --> 00:53:01,490
I like to call it the
pre-mortem unfortunately,

1272
00:53:01,490 --> 00:53:02,420
you know what could go wrong?

1273
00:53:02,420 --> 00:53:04,740
Let's figure it out before it happens

1274
00:53:05,680 --> 00:53:07,440
and then factor that in.

1275
00:53:07,440 --> 00:53:09,290
- [April] Hey, if I
could save somebody else,

1276
00:53:09,290 --> 00:53:11,270
boatloads of money, I'm in.

1277
00:53:14,116 --> 00:53:15,760
- That's great.

1278
00:53:15,760 --> 00:53:17,860
I'm sorry you're in a position
to share that much knowledge,

1279
00:53:17,860 --> 00:53:20,130
but certainly, well, sir,

1280
00:53:20,130 --> 00:53:22,560
we're certainly in a position
to help spread the word.

1281
00:53:22,560 --> 00:53:23,500
So we--

1282
00:53:23,500 --> 00:53:25,290
- [April] It's a learning experience.

1283
00:53:25,290 --> 00:53:27,219
And you know, like I said,

1284
00:53:27,219 --> 00:53:32,219
it's literally irresponsible
for a landowner with a business

1285
00:53:33,490 --> 00:53:36,050
like that, especially in
the business of maple,

1286
00:53:36,050 --> 00:53:38,880
in the business of any agriculture.

1287
00:53:38,880 --> 00:53:42,640
It's literally irresponsible
not to have some kind of a plan

1288
00:53:44,350 --> 00:53:49,350
and to have things put into legal terms.

1289
00:53:52,670 --> 00:53:54,950
Because if they're not there,

1290
00:53:54,950 --> 00:53:59,950
the aggravation that it causes
is it's irreparable damage.

1291
00:54:04,863 --> 00:54:06,520
- I'll just chime in here, back to John.

1292
00:54:06,520 --> 00:54:07,620
You had a question.

1293
00:54:07,620 --> 00:54:08,530
I'm not finding that,

1294
00:54:08,530 --> 00:54:10,980
but I do have some documentation on that,

1295
00:54:10,980 --> 00:54:13,980
potentially that situation
as relates to water quality.

1296
00:54:13,980 --> 00:54:16,440
If you want to send me an email,
I'd be glad to send you it,

1297
00:54:16,440 --> 00:54:19,130
it probably just take me 10
minutes to find that old slide

1298
00:54:19,130 --> 00:54:19,963
and old document.

1299
00:54:19,963 --> 00:54:21,610
So, I'm just going to put my email

1300
00:54:21,610 --> 00:54:26,610
in the chat box and send me a
note and I can get back to you

1301
00:54:28,230 --> 00:54:29,830
probably before bedtime on that.

1302
00:54:30,790 --> 00:54:31,623
Well, folks.

1303
00:54:31,623 --> 00:54:33,850
- I think we're yeah, eight o'clock.

1304
00:54:33,850 --> 00:54:34,683
- All right. Well,

1305
00:54:34,683 --> 00:54:37,480
thanks a lot for thanks a
lot for joining us tonight.

1306
00:54:37,480 --> 00:54:38,313
Like I said,

1307
00:54:38,313 --> 00:54:39,730
we're going to be working on this project

1308
00:54:39,730 --> 00:54:43,390
and we will have a sample
templates forthcoming later

1309
00:54:43,390 --> 00:54:47,080
on this winter, talked a
little bit about the sugar bush

1310
00:54:47,080 --> 00:54:48,140
and sugar house leases.

1311
00:54:48,140 --> 00:54:49,943
Those are available as well.

1312
00:54:51,510 --> 00:54:53,610
We are going to have some
lawyers working with us.

1313
00:54:53,610 --> 00:54:55,890
So there is an Ask the Team
function on that website.

1314
00:54:55,890 --> 00:54:57,970
If you do have a specific
question you didn't want to ask

1315
00:54:57,970 --> 00:55:00,960
tonight, it can come into us
confidentially through that,

1316
00:55:00,960 --> 00:55:05,290
Ask the Team module on the
maplemanager.org website.

1317
00:55:05,290 --> 00:55:06,940
And if we get any good ones there,

1318
00:55:06,940 --> 00:55:08,630
I think we've got some legal services

1319
00:55:08,630 --> 00:55:11,260
that we can tap into to at least get a,

1320
00:55:11,260 --> 00:55:13,540
try to get you an answer
that's better than it depends.

1321
00:55:13,540 --> 00:55:15,490
Hopefully we'll get you
something a little more specific

1322
00:55:15,490 --> 00:55:17,130
than that.

1323
00:55:17,130 --> 00:55:18,463
So feel free to use that.

1324
00:55:19,810 --> 00:55:21,920
So with that, I hope you
all have a good evening.

1325
00:55:21,920 --> 00:55:24,800
Check out two more webinars
later in October here,

1326
00:55:24,800 --> 00:55:26,363
before we wrap up our series.

1327
00:55:27,240 --> 00:55:28,440
Thanks a lot for coming.

1328
00:55:30,450 --> 00:55:31,593
- Good night everyone.