A "most favored customer" clause is a contractual provision ensuring that the customer receives terms as favorable as those granted to any other customer. This clause typically requires the seller to extend the same benefits or prices to the favored customer whenever offering better terms to others.
Most Favored Customer i. The price charged Buyer for any Item shall always be Supplier's lowest price charged any customer for that Item regardless of any special terms, conditions, rebates, or allowances of any nature (other than annual purchase volumes as described below). If Supplier sells any similar Item to any customer at a price less than that set forth herein, Supplier shall adjust its price to the lower price for any un-invoiced Item and for all outstanding and future invoices for such Item, and shall rebate to Buyer an amount equal to the difference in the price paid by Buyer and the lower price for any invoices already paid by Buyer for such Item. Each of the above adjustments and the rebate shall be calculated from the date Supplier first sells the Item at the lower price. ii.Supplier will provide reasonable commercial evidence that the items being compared are not “similar”. For Items designated as custom Items, for purposes of comparing price under this Section, the price of the Item shall include those Supplier cost components that are generic to the Item as compared to other similar items generally sold by Supplier. Such comparison shall be made to the extent items have similar characteristics, such as form, fit, function (e.g., memory size), manufacturing process, annual purchase volumes and other specific comparison criteria agreed upon by the parties. For the purpose of this Section 1.B.ii, the Buyer's annual purchase volume shall be considered identical if it is within twenty five percent (25%) of the annual purchase volume for the comparable item by the comparison buyer. iii. In the event Supplier offers for the Item or a similar Item a lower price either as a general price drop or only to some customer(s) for any reason, Supplier shall immediately inform Buyer of this price and price protect Buyer's inventory of affected Items by rebating to Buyer an amount equal to the difference in the price paid by Buyer and the lower price for all such Items pulled into Buyer's manufacturing process for consumption retroactive to the date Supplier first sells the Item at a lower price.
Licensee shall sell products and/or services resulting from Licensed Technology to University and its Affiliates at such price(s) and on such terms and conditions as such products and/or services are made available to Licensee’s most favored customer.
The contract contains a most favored customer clause guaranteeing the Company prices equal or lower than those charged to other customers. The Company has not yet made purchases from CPR.
Most Favored Customer. Purchaser shall not at any time sell Cannabis to a different buyer at prices below those stated in this Agreement. If Purchaser charges a different buyer a lower price for Cannabis, Supplier shall immediately apply such lower price for the Cannabis under this Agreement. If Supplier fails to meet the lower price, Purchaser, at its option, may terminate this Agreement without liability.
Most Favored Customer Pricing. (a)Physical supply of equipment and LanzaTech proprietary microbes and supply of Basic Engineering Services (together “LanzaTech Technology”) for any Licensed Facility, which the Parties agree [***], shall be made available for sale or license to Suncor, its Affiliates or its Sublicensees at the lowest price and on the most favored terms that LanzaTech and/or its Affiliates have offered, sold, or licensed such LanzaTech Technology, within the [***] preceding the date of purchase or license by Suncor, its Affiliate or its Sublicensee (or, if no reference terms are available within such [***] period, then [***]. (b) If LanzaTech licenses all or part of the Licensed Subject Matter to an unrelated third party under similar conditions to any Licensed Facility or Licensed Facilities, and royalties paid per unit of a Product by such unrelated third party in consideration of such license are less than the royalties paid by Suncor per unit of the same Product in consideration of the Commercial License, then LanzaTech will agree at Suncor’s written request to [***].
The term Most Favored Customer (MFC) refers to a contractual agreement between a seller and a buyer where the seller guarantees the buyer the most favorable pricing that it offers to any of its other customers. This arrangement ensures that the buyer will not pay more than other clients who receive special preferences or discounts. The MFC clause is primarily used to maintain competitive equity among customers and prevent price discrimination.
You should consider using an MFC clause when you:
When drafting an MFC clause, consider the following elements to ensure clarity and enforceability:
Example:
Seller agrees that for the duration of this contract, no more favorable price, discount, or rate for [Product/Service] will be offered or paid by any other current or future customer. Should Seller offer another customer more favorable pricing, Seller will automatically adjust the pricing in this agreement to match those terms.
MFC clauses are commonly found in several types of contractual arrangements, including:
These scenarios demonstrate where MFC clauses can be effectively implemented to maintain equitable pricing across various customers in different industries.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Most Favored Nation" clause is a contractual provision that ensures a party receives terms that are at least as favorable as those given to any other party in similar agreements. This clause is commonly used to prevent discrimination and to maintain competitive equal footing among contracting parties.
A mutual agreement clause specifies that certain actions, changes, or decisions within a contract require the consent of all involved parties before implementation. This clause ensures that all parties have equal input and acknowledge any modifications to the original terms, promoting collaboration and fairness in the contractual relationship.
A mutual confidentiality clause is an agreement between parties to protect each other's confidential information from unauthorized disclosure or use. It requires both parties to maintain the confidentiality of shared sensitive information and can outline the duration, scope, and any permissible exceptions to this obligation.
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