Quality Price Adjustments Clause Samples
The Quality Price Adjustments clause establishes a mechanism for modifying the contract price based on the quality of goods or services delivered. In practice, this means that if the delivered products or services do not meet specified quality standards, the price may be reduced, or if they exceed expectations, a premium may be paid. This clause ensures that both parties are incentivized to maintain agreed-upon quality levels and provides a fair method for addressing deviations, ultimately protecting the buyer from substandard performance and rewarding superior outcomes.
Quality Price Adjustments. The price paid by the Seller for the coal delivered hereunder will be adjusted based on the quality of the coal as follows:
Quality Price Adjustments. (a) The Base Price is based on coal meeting or exceeding the Guaranteed Monthly Weighted Average specifications as set forth in SECTION 6.1. Quality price discounts shall be applied for each specification each month to reflect failures to meet the Guaranteed Monthly Weighted Averages set forth in SECTION 6.1, as determined pursuant to SECTION 7.2, subject to the provisions set forth below. The discount values used are as follows: CONTRACT #▇▇-▇▇▇-▇▇▇ DISCOUNT VALUES --------------- $/MMBTU ------- BTU/LB 0.2604 $/LB./MMBTU ----------- SULFUR 0.1232 ASH 0.0083 MOISTURE 0.0016 (b) Notwithstanding the foregoing, for each specification each month, there shall be no discount if the actual Monthly Weighted Average meets the applicable Discount Point set forth below. However, if the actual Monthly Weighted Average fails to meet such applicable Discount Point, then the discount shall be calculated on the basis of the difference between the actual Monthly Weighted Average and the Guaranteed Monthly Weighted Average pursuant to the methodology shown in Exhibit A attached hereto. Guaranteed Monthly Weighted Average Discount Point ---------------- -------------- BTU/LB min.11,000 10,700 LB/MMBTU --------- SULFUR max. 3.1 3.2 ASH max. 9.0 9.5 MOISTURE max. 13.0 14.0 For example, if the actual Monthly Weighted Average of ash equals 10.0 lb/MMBTU, then the applicable discount would be (10.0 lb. - 9.0 lb.) x $0.0083/lb./MMBTU = $.0083/MMBTU. 11 CONTRACT #▇▇-▇▇▇-▇▇▇
Quality Price Adjustments. Effective as of January 1, 2022, and with respect to Shipments thereafter, Section 8.2 Quality Price Adjustments, is deleted in its entirety and is replaced with the following provisions:
Quality Price Adjustments. The Total Base Price as stated in Section 9.4 is applicable to Biomass Fuel conforming to the Guaranteed Specifications on an As Received basis. Quality Price Adjustments (premiums and penalties) shall be imposed to reflect variances from the Guaranteed Specifications and shall be determined as set forth below: By methods generally accepted in the industry, as soon as is practicable following the end of each month, Buyer shall determine and report to Seller: