Production Risk Clause Samples
The Production Risk clause allocates responsibility for risks associated with the manufacturing or creation of goods or services under a contract. It typically outlines which party bears the consequences of delays, defects, or failures in the production process, and may specify remedies or limitations of liability if production targets are not met. This clause is essential for clarifying expectations and managing potential disputes by defining who is accountable for production-related issues, thereby reducing uncertainty and allocating risk between the parties.
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Production Risk. The risk of production and delivery typically sits with the grower. The Pools managed by CBH Grain operate with the purpose of marketing the grain which growers commit to the Pool, and returning this value back to the grower. Such marketing activity could include executing commodity hedging against committed grain, and hedging against fluctuations in the currency. Should a grower default on their commitment to deliver grain into a Pool, this could result in a loss to the Pool (including loss of profit) arising from marketing activities undertaken on behalf of committed grain. If a grower fails to deliver committed grain, CBH may at its discretion:
(1) pass on to the defaulting grower any costs associated with the unwinding of pricing and hedging positions, or
(2) wash out of sales in accordance with these terms and conditions, or
(3) buy grain on behalf of the grower and deliver to the relevant CBH Pool and claim the money so expended plus interest from the defaulting grower.
Production Risk. The Company’s revenues could decline if it fails to meet its production goals and release schedules. The loss of key executives or the failure to hire and integrate a capable new executive in place of either of them could harm the Group Members’ business. If the Group Members are unable to continue to attract creative talent, the quality and/or commercial success of the motion pictures the Company produces may decline. The Group Members’ future performance and profitability could be impaired if they are unable to manage growth. Because the terms of a standard completion bond state that the bond company may take control of the production if the Company does not produce the Film on schedule and within budget, the artistic integrity and commercial viability of the Film may be reduced. If the Company does not complete any motion picture on schedule or within budget, its ability to generate revenue may be diminished or delayed.