Annual Volume Commitment (AVC) Clause Samples
An Annual Volume Commitment (AVC) clause requires one party, typically the buyer, to purchase a specified minimum quantity of goods or services from the seller within a defined year. This clause often outlines the exact volume required, the measurement period, and any consequences for failing to meet the commitment, such as penalties or make-up rights in subsequent periods. Its core function is to provide predictability and security for the seller by ensuring a baseline level of sales, while also helping both parties plan production and inventory more effectively.
Annual Volume Commitment (AVC). Total Volume Commitment (TVC).
Annual Volume Commitment (AVC). Customer agrees to pay Verizon the amount of Eligible Charges in each Contract Year that is no less than the AVC identified in the Agreement, for the number of Contract Years/Volume Commitment Period identified in that Agreement. If the Agreement does not identify an AVC or number of Contract Years/Volume Commitment Period, then the applicable number is zero. If, in any Contract Year/Volume Commitment Period, Customer's Eligible Charges are less than the AVC, then Customer will pay: (a) all accrued but unpaid charges incurred by Customer; and (b) an underutilization charge (which Customer hereby agrees is reasonable) equal to 75% of the difference between Customer's Eligible Charges during such Contract Year and the AVC.