take or pay contract definition

take or pay contract

Buyer-seller agreement where (unlike in a take and pay contract) the buyer's obligation to pay is unconditional whether or not the purchased goods or services are delivered or taken. Such arrangements are often used as indirect guaranties for project financing, and protect the buyers from price increases and the sellers from price decreases. Force majeure cannot be used as a defense in these 'hell or high water' type contracts. See also throughput contract and tolling contract.

take or pay contract is in the Agreements & Contracts and Purchasing & Procurement subjects.

take or pay contract appears in the definition of the following term: take and pay contract

This content can be found on the following page:

http://www.businessdictionary.com/definition/take-or-pay-contract.html