Frequently Asked Questions

Agricultural Law

PACA Trust Protection

Is it true that only USDA licensed as brokers, dealers, and commission merchants may protect their PACA trust rights by printing special language on their invoices?

Probably. The Perishable Agricultural Commodities Act states: "[A] licensee may use ordinary and usual billing or invoice states to provide notice of the licensee's intent to preserve the trust. The bill or invoice statement must include the information required by the last sentence of paragraph (3) [payment terms] and contain on the face of the statement the following:

"The perishable agricultural commodities listed on this invoice are sold subject to statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received."