Annual Minimum Volume Guarantee Clause Samples
An Annual Minimum Volume Guarantee clause requires one party, typically the buyer, to purchase or take delivery of a specified minimum quantity of goods or services from the seller within a defined year. This clause often includes provisions for what happens if the minimum is not met, such as financial penalties, make-up rights in future periods, or automatic invoicing for the shortfall. Its core function is to provide the seller with predictable revenue and production planning, while allocating the risk of underperformance to the buyer.
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Annual Minimum Volume Guarantee. Notwithstanding any other provision in this Agreement, the DHL Blocked Space shall not be reduced by more than [*] of the DHL Blocked Space on a year-to-year basis on any Core Service (the “Annual Minimum Volume Guarantee”). If the DHL Blocked Space falls below the Annual Minimum Volume Guarantee for any Core Service during any Annual Reconciliation period, DHL shall nevertheless pay for the DHL Blocked Space up to the level of the Annual Minimum Volume Guarantee at the Blocked Space Rates (including applicable surcharges and fees at the time) set forth herein as if it had utilized such DHL Blocked Space. Any amounts owed by DHL to Company pursuant to this Section 2.7.4 shall be calculated and reconciled as part of the Annual Reconciliation set forth in Section 4.5 of this Agreement.