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The Trust Notice Method

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Another method for preserving trust rights is by giving a separate trust notice to the buyer or agent. Non-licensed sellers or growers cannot use the invoice method. They must send a separate trust notice with the necessary information to the buyer or agent within 30 days of when payment is due. See Notice of Intent to Preserve Trust Benefits.

The two (2) main problems with trust notices are: sending the notice on time, and assuring proof of delivery to the buyer or agent.

The sending deadlines are a little tricky because they are tied to the time when payment is due. On a sale, payment is due ten (10) day after receipt of the produce unless there is a prior written agreement extending the time for payment. In such a case, a seller or grower has 40 days to give the notice (10 day payment term + 30 more days to give the trust notice).

If there is a prior written payment agreement extending the payment term, for example to 21 days, then the notice must be given within 51 days of delivery. The maximum time for payment is 30 days from receipt of the produce. This increases the time for giving the trust notice up to 60 days. However, if payment terms are beyond 30 days from delivery of the produce, all trust protection is lost.

Assuring proof that the buyer or agent received the trust notice means sending the trust notice by a method that verifies receipt, such as email, FAX, overnight mail, or registered mail, rather than regular mail.

Foreign Shippers

Foreign companies shipping produce to the U.S. are eligible for protection under the trust. However, these companies are not licensed under PACA. So, a seller, supplier or grower that is a foreign entity must follow the trust notice method to preserve its trust rights, as explained above.