Annual Purchase Order Clause Samples
An Annual Purchase Order clause establishes the terms under which a buyer commits to purchasing a specified quantity of goods or services from a supplier over a one-year period. This clause typically outlines the total volume, delivery schedule, and pricing applicable for the year, and may include provisions for adjustments based on actual usage or demand. Its core function is to provide predictability and stability for both parties by securing supply and locking in terms, thereby reducing the risk of shortages or price fluctuations.
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Annual Purchase Order. At least thirty (30) days before the beginning of each calendar year, Alexza shall provide Autoliv with a written purchase order (“Annual Purchase Order”) that specifies (i) the number of units of Chemical Heat Packages Alexza will purchase from Autoliv during such calendar year; (ii) the fixed unit purchase price for such Chemical Heat Packages as set forth on Exhibit C; (iii) the billing and ship-to addresses; and (iv) any special instructions or other pertinent requirements. Alexza may update the billing and ship-to addresses during the course of such year by written notice to Autoliv. Autoliv must accept or reject each Annual Purchase Order within thirty (30) days after the receipt thereof, provided that it may not reject any Annual Purchase Order unless (a) such Annual Purchase Order does not comply with the terms set forth in subsections (i)-(iii) of this Section 3.3, or (b) the quantity ordered on such Annual Purchase Order is a material increase over the quantities set forth for such calendar year in the then-current Strategic Forecast. Upon Autoliv’s acceptance, each Annual Purchase Order shall be binding on the parties, provided that Alexza is not obligated to accept more than 80% of the quantity specified on such Annual Purchase Order.