Cancellation Payments Clause Samples
The Cancellation Payments clause defines the financial obligations that arise when a contract or agreement is terminated before its completion. Typically, this clause outlines how much one party must pay the other in the event of cancellation, which may include reimbursement for costs incurred, compensation for lost profits, or a predetermined cancellation fee. Its core practical function is to allocate the risk and financial consequences of early termination, ensuring both parties understand their potential liabilities and reducing disputes over compensation if the agreement is ended prematurely.
Cancellation Payments. (a) If Kenvue (i) cancels a Binding Purchase Order (except in accordance with Article 9) or (ii) reduces the forecasted Product amounts set forth in the binding portion of a prior accepted Rolling Forecast (each, a “Cancellation Event”), J&J will charge Kenvue for the Price of all Products under the cancelled Binding Purchase Order or all Products by which the binding portion of a previous accepted Rolling Forecast was reduced (as adjusted pursuant to Section 4.07(b), a “Cancellation Payment”); provided that, if the applicable finished, sellable Products have not been Manufactured as of the time of such cancellation or reduction, J&J shall use commercially reasonable efforts to mitigate any wasted Raw Materials or manufacturing capacity resulting from such Cancellation Event, and the Cancellation Payment will be reduced, in accordance with Section 4.07(b).
(b) In the event of a Cancellation Event, if J&J has (i) purchased Raw Materials (A) in the case of a Cancellation Event pursuant to Section 4.07(a)(i), for the Products indicated in such Binding Purchase Order or (B) in the case of a Cancellation Event pursuant to Section 4.07(a)(ii), for the Products indicated in such prior accepted Rolling Forecast and in accordance with applicable Raw Material lead times that are longer than the binding portion of such Rolling Forecast, or (ii) commenced Manufacture of Products under such Binding Purchase Order, J&J will, prior to invoicing Kenvue for the applicable Cancellation Payment, use commercially reasonable efforts to return any applicable Raw Materials to suppliers and receive a full or partial credit or refund for such or designate any applicable Raw Materials for use in the manufacture of products for J&J’s other customers and representatives (including of the J&J Business) and utilize the manufacturing capacities of the Facilities that would have been used to fulfill the cancelled Binding Purchase Order or cancelled portion thereof for other J&J manufacturing activities. J&J will reduce the Cancellation Payment for any amounts received or costs mitigated by the foregoing efforts, as reasonably determined by J&J in good faith.
(c) J&J will invoice Kenvue for the Cancellation Payment within forty-five (45) calendar days after the Cancellation Event. Any such invoice shall be issued and paid in accordance with Section 3.01(f).
Cancellation Payments. In addition to the payments required pursuant to Section 11.2, if cancellation of performance or modification of programming results in the cancellation of more than fifteen percent (15%) of rehearsal hours for any specific program, the Association agrees to pay each Professional Member contracted for the work affected by such cancellation of performance or modification of programming a penalty according to the schedule set forth below. With notification prior to the first rehearsal of: More than 90 days 0% of lost performance/rehearsal pay 61-90 days 25% of lost performance/rehearsal pay 31-60 days 50% of lost performance/rehearsal pay 30 days or less 75% of lost performance/rehearsal pay
Cancellation Payments