Pricing

Take-or-pay

A commitment where the customer must purchase a minimum volume or compensate for the shortfall.

Take-or-pay underwrites capacity investment: the supplier prices as though the volume is certain because contractually it is. Enforcement is the weak point — shortfalls are usually identified at annual review, long after the commercial conversation could have changed the outcome.

Tracking actual-versus-committed weekly, aggregated across every ship-to location, is what turns the clause into a live commercial instrument rather than a year-end argument.

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