A requirements contract is an agreement in which a buyer commits to purchasing all or a specific percentage of its needed goods or services exclusively from a particular supplier during the contract period. This arrangement ensures the supplier has a dependable customer, while the buyer benefits from a consistent source for their requirements.
Partial requirements contracts address the concerns of some members that desire self-supply above the 5% provisions in their current contracts. Since June 2019, a Contract Committee of all Tri-State’s members evaluated proposals for more flexibility, resulting in both the new partial requirements contract option and expanded opportunities for community solar projects.
Members of Tri-State can express their intent to transition to partial requirements contracts by participating in an upcoming open season period to allocate an aggregate 300 megawatts of system-wide member self-supply capacity. The open season capacity is 10% of Tri-State’s system peak demand.
Requirements Contract. A requirements contract provides for filling all actual requirements for services during a specified contract period with time or duration to be scheduled by placing task orders (TO) with the contractor. Each TO issued against this contract shall have a separate POP (period of performance). Funds will be obligated on task order based on actual needs. The information below depicts the Government’s realistic estimate for anticipated need over the course of the contract. This estimate was developed using historical data from the previous contract and projected needs at the time of the RFP.
Requirements Contract. Except as otherwise provided in this Agreement, LWE shall buy from Seller and Seller shall sell to LWE pursuant to this Agreement all of the Producer corn LWE needs for the operation of the Plant during the term of this Agreement and run-out period after the Agreement terminates. Notwithstanding the foregoing, Seller shall not be held liable for failure of delivery of necessary quantity of corn as required to meet the Plant’s ethanol production schedule. LWE hereby promises, agrees, represents, warrants and covenants that LWE maintains full responsibility for sourcing and arranging for delivery of all corn needed to supply the Plant, and LWE is solely responsible to cover holiday weekends, anticipation of abnormal weather conditions, or other events likely to disrupt corn delivery.
Requirements contract. The identification of a requirements contract’s notional amount may require the consideration of volumes or formulas contained in attachments or appendixes to the contract or other legally binding side agreements. The determination of a requirements contract’s notional amount must be performed over the life of the contract and could result in the fluctuation of the notional amount if, for instance, the default provisions reference a rolling cumulative average of historical usage.
Requirements Contract. (a) US Mine Corp shall use commercially reasonable efforts to supply Purebase with all of its requirements for Materials requested under this Agreement. Purebase agrees to purchase from US Mine Corp those requirements for Materials as identified in Exhibit A attached hereto and incorporated herein by this reference, which may be amended, modified or supplemented after the Effective Date hereof in accordance with this Agreement. However, should Purebase determine to obtain some or all of the Materials from a source other than US Mine Corp, then in such case, Purebase shall modify Exhibit A as, and if necessary, to reflect any resulting change in the requirements for Materials from US Mine Corp. (b) All kaolin clay provided pursuant to this Agreement shall be used exclusively for agricultural products and supplementary cementitious materials (SCM) products. US Mine Corp will supply metakaolin for the material for the purpose of SGM.
Existing members shall continue to purchase from this Corporation and this Corporation shall continue to sell to such members electric power and energy in accordance with the terms and conditions of the all-requirements contracts existing as of the date of these Bylaws, and as such all-requirements contracts may be amended or replaced by another all-requirements contract until (i) such all-requirements contract is terminated or expires in accordance with its terms or (ii) is modified, amended or replaced due to a change in the member’s membership class.
If a requirements contract contains explicit provisions that support the calculation of a determinable amount reflecting the buyer’s needs, then that contract has a notional amount. See paragraphs 815-10-55-5 through 55-7 for related implementation guidance. For implementation guidance on identifying a commodity contract's notional amount, see paragraph 815-10-55-5.
A requirements contract is a type of legal agreement between a buyer and a seller where the buyer agrees to purchase and the seller agrees to supply as much of a good or service as the buyer requires during a specified period. Unlike other contracts that specify fixed quantities, a requirements contract is centered around the buyer’s actual needs.
You should consider using a requirements contract in situations where:
When drafting a requirements contract, ensure the following elements are included:
Requirements contracts are typically found in industries and scenarios such as:
Example: A car manufacturer enters into a requirements contract with a tire supplier, agreeing to buy all the tires it needs for the production of cars over the next three years, without specifying the exact number of tires.
Example: A local government enters into a requirements contract with a fuel supplier to provide all the heating oil required for its buildings over the winter season.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Reservation of Rights" clause ensures that a party does not waive any legal rights or remedies available to them by entering into an agreement or by refraining from enforcing any term or condition immediately. It serves to protect a party's ability to enforce rights at a later time, without implying consent or acceptance of any contractual breaches.
A "Resignation for Good Reason" clause allows an employee to resign while still receiving severance benefits if significant negative changes—such as a substantial reduction in salary or job responsibilities—occur within the company environment without the employee's consent. This clause is designed to protect employees from adverse modifications to their employment terms, maintaining fairness and security in their job conditions.
The "Resolution Date" clause specifies a deadline by which a dispute, issue, or contractual obligation must be resolved or concluded. It establishes a fixed date to ensure timely action and closure between the parties involved, maintaining accountability and minimizing prolonged uncertainties.
Try our AI contract analysis and extract important clauses and information from existing contracts.
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