Take-or-Pay Obligation Clause Samples
A Take or Pay Obligation requires one party, typically the buyer, to either take delivery of a specified quantity of goods or services or pay for them regardless of actual receipt. In practice, this means that even if the buyer does not need or use the full amount contracted, they are still financially responsible for the agreed minimum. This clause ensures the seller receives a guaranteed level of revenue and protects them from fluctuations in the buyer’s demand, thereby allocating risk and providing financial certainty.
POPULAR SAMPLE Copied 1 times
Take-or-Pay Obligation. (a) During the Term of this Contract, Seller shall invoice Buyer and Buyer shall pay Seller, within thirty days of the date of such invoice, an amount equal to the greater of: (i) the Minimum Monthly Amount, or (ii) the Actual Monthly Amount.
(b) The Minimum Monthly Amount shall be reduced each Month for any deficiencies in the amount of Product made available by Seller to Buyer due to (i) force majeure as defined in Article XIV, or (ii) failure by Seller to deliver quantities of Product up to Buyer’s Daily Contract Quantity obligation when and as requested.
Take-or-Pay Obligation. Subject to Section 6.06 hereof, ▇▇▇▇▇▇▇ agrees that each day from the Shipper Commencement Date through the end of the Term, it shall ship on the Diluent Pipeline, or otherwise pay for the shipment of, at least the Committed Volume. Shipper is not permitted to reduce the Committed Volume, except as otherwise expressly permitted by this Agreement.
Take-or-Pay Obligation. (a) In each Contract Quarter, Buyer shall be obliged to take and pay for, or pay for if not taken, a quantity of Gas at least equal to 80% (eighty percent) of the Quarterly Contract Quantity less the sum of the following quantities for each day during such Contract Quarter (but without double counting any of the following quantities):
1. any quantity of Gas up to the DNQ for the relevant day and which ▇▇▇▇▇ was prevented from purchasing and taking by reason of Force Majeure; plus
2. any quantity of Gas up to the DNQ for the relevant day that Seller failed to make available for delivery unless such failure was: (i) caused by ▇▇▇▇▇’s failure to comply with the terms of this Agreement; or (ii) due to the exercise of Seller’s right to suspend Gas deliveries pursuant to Clause 19; plus
3. any quantity of Gas up to the DNQ for the relevant day that ▇▇▇▇▇ would have purchased and taken but which ▇▇▇▇▇ rejected in accordance with Clause 13 because it failed to meet the Specifications; plus
4. any quantity of Gas up to the DCQ for the relevant day which a Party did not nominate or schedule due to Planned Maintenance pursuant to Clause 14. (collectively, the “Take or Pay Quantity”) For the avoidance of doubt, during a period of Force Majeure and Planned Maintenance, in case the Buyer offtakes any quantities of Gas from the Seller, such quantities of Gas will not be deducted under points 1 and 4 above respectively while computing the Take or Pay Quantity. The deduction will be only to the extent of quantities of Gas which the Buyer was prevented from offtaking due to Force Majeure or Planned Maintenance.
(b) If, in any Contract Quarter, Buyer fails to take the Take or Pay Quantity for such Contract Quarter, then the Seller shall compute the Quarterly Minimum Guaranteed Offtake Charges (“QMGO Charges”) which shall be an amount equal to the product of:
(A) the Weighted Average Gas Price applicable during such Contract Quarter; and (B) the Quarterly Shortlifted Quantity for such Contract Quarter.
(i) Buyer offtakes entire Gas available, then Buyer shall pay only for the actual supply of Gas;
(ii) Buyer offtakes Gas quantities which is less than the quantities available with the Seller then Buyer will pay for the quantities made available by the Seller.
(c) The Quarterly Shortlifted Quantity, for which QMGO Charges have been computed by the Seller, will be the basis for determining the Make Up Gas which may be supplied to the Buyer in accordance with Clause 10.3 below.
(...
Take-or-Pay Obligation. The minimum monthly quantity of natural gas that must be taken, and if it is not taken, must nevertheless be paid for by Buyer ("Take or Pay Quantity"), shall be 90% (ninety percent) of the sum of all MDQs, during each calendar month, with the following deductions: (i) the quantities corresponding to Fortuitous Cases or Force Majeure, (ii) the quantities that having been duly nominated by Buyer, were not made available to it by Seller due to different causes such as Fortuitous Cases and/or Force Majeure, and/or (iii) reductions in MDQ due to a Yearly Scheduled Maintenance.
Take-or-Pay Obligation. The Buyer must pay the MMC to the Sellers for each month during the Supply Term. In addition to the payment of the MMC, if the total quantity of gas delivered (including Make up Gas) at the end of the Supply Term is less than the MCQ, then the Buyer will pay the Sellers the difference between the total quantity of Gas delivered and the MCQ at the then prevailing Contract Price.
Take-or-Pay Obligation. (a) Each Month during the Primary Term of this Contract, Buyer shall pay Seller an amount equal to the greater of: (i) the Minimum Monthly Amount, or (ii) the Actual Monthly Amount.
(b) The Minimum Monthly Amount shall be reduced each Month for any deficiencies in the amount of Product made available by Seller to Buyer due to (i) force majeure as defined in Article XIV, or (ii) failure by Seller to deliver quantities of Product up to Buyer’s take or pay obligation.
(c) Buyer shall provide Seller with a surety bond to ensure Buyer’s payment of any take or pay obligation incurred pursuant to this Paragraph 5.2. Such bond shall name Seller as beneficiary, shall be approved by Seller as to form and issuer, shall be maintained for the life of the Contract and shall be of sufficient size to cover Buyer’s yearly take or pay requirements and the DCQ requirements.