An RWA (Ready, Willing and Able) letter is a formal seller's declaration confirming their capacity to supply a commodity on specific terms. It is typically issued after a buyer sends an ICPO or LOI, and before the SPA is executed.
When an RWA is Used
The RWA bridges the gap between a buyer's initial inquiry and the formal contract stage. It serves as the seller's counter-offer and confirmation of genuine product access:
- Buyer sends ICPO or LOI expressing purchase intent
- Seller issues RWA confirming product availability, price, and terms
- Buyer reviews RWA and initiates SPA negotiation
- SPA executed — legally binding contract in place
RWA vs. FCO
| Feature | RWA | FCO (Full Corporate Offer) |
|---|---|---|
| Direction | Seller confirms capacity in response to buyer inquiry | Seller proactively offers product to market |
| Trigger | Issued in response to ICPO or LOI | Issued proactively or as response |
| Formality | Statement of readiness | Detailed commercial offer with full terms |
| Typical length | 1–2 pages | 3–5 pages with annexes |
Frequently Asked Questions
- What does RWA mean in commodity trade?
RWA stands for Ready, Willing and Able. It is a formal letter issued by a seller (or sometimes buyer) declaring that they have the product (or funds) available, are willing to transact on stated terms, and are able to perform under the proposed contract. It is typically issued in response to an ICPO or LOI.
- Who issues an RWA?
An RWA is most commonly issued by the seller or their mandated representative after receiving an ICPO from a buyer. It confirms: the product exists, the seller is willing to sell on stated terms, and the seller can perform delivery within the proposed timeline.
- Is an RWA legally binding?
An RWA is a declaration of intent, not a binding contract. It does not obligate the seller to deliver or the buyer to buy. The SPA (Sales and Purchase Agreement) is the binding contract. However, a false RWA issued fraudulently can constitute misrepresentation.
- What should an RWA letter contain?
A valid RWA should include: seller's full corporate name and registration; product specification and grade; available quantity; price or price formula; delivery terms (FOB/CIF, port); payment instrument accepted; tank storage terminal reference; validity period; and authorised signatory details.