Decrease in the Contract Price Clause Samples
The "Decrease in the Contract Price" clause establishes the conditions under which the agreed-upon price for goods or services under a contract may be reduced. Typically, this clause applies if the delivered goods or services do not fully meet the contract specifications, are delayed, or if there are other breaches that diminish their value. For example, if a supplier delivers fewer units than promised or the quality is substandard, the buyer may be entitled to a proportional reduction in the price. The core function of this clause is to provide a fair mechanism for adjusting payment to reflect actual performance, thereby protecting the buyer from overpaying for incomplete or deficient deliverables.
Decrease in the Contract Price. The method of calculating the decrease in the Cost of the Work and Contract Price resulting from a Change Order shall be the amount of the actual net decrease in the Cost of the Work plus an amount equal to five percent (5%) of the amount of such net decrease to compensate the Contractor for the Contractor’s overhead a profit as a result of the decrease in the Cost of the Work and Contract Price.