Output Requirement Clause Samples
An Output Requirement clause defines the specific quantity or level of goods, services, or deliverables that a party is obligated to provide under a contract. Typically, it sets measurable standards or minimum thresholds that must be met, such as a certain number of units produced per month or a specified quality level for deliverables. This clause ensures that both parties have a clear understanding of the expected output, reducing ambiguity and helping to prevent disputes over performance obligations.
Output Requirement. Starting the first full calendar year after the Commercial Operation Date of the Facility, for each year during the Delivery Period, Seller shall deliver to Buyer no less than seventy percent (70%) of the Expected Annual Output averaged over two consecutive calendar years on a rolling basis during the Delivery Period (the “Net Output Requirement”). Where a Permitted Excuse to Perform adversely affects actual generation output of the Facility, the Net Output Requirement shall be reduced by the amount of Energy not generated due to the Permitted Excuse to Perform; provided, however, Seller agrees that it must demonstrate to Buyer, in ▇▇▇▇▇’s Commercially Reasonable discretion, that the Facility’s generation output was actually reduced due to a Permitted Excuse to Perform. ▇▇▇▇▇’s sole remedy for Seller’s failure to deliver the Net Output Requirement for any period of two consecutive years shall be to receive a credit against the Contract Price for each month during the immediately following full calendar year. The foregoing monthly credit to Buyer shall be determined by (a) multiplying (i) the difference between the Net Output Requirement and the actual Energy (expressed in MWh) delivered by Seller and received by Buyer during the applicable period by (ii) 50% of the average Contract Price for Energy delivered to Buyer in the previous 12 months and (b) then dividing the amount calculated by
(a) above by twelve (12). If Seller fails to satisfy the Net Output Requirement for any two-year period, to determine compliance with the Net Output Requirement in the next rolling two-year period, then the amount of Energy generated in the first year of such two-year rolling period will be deemed to be the higher of (i) seventy percent (70%) of the Expected Annual Output for such year, or (ii) the actual amount of Energy generated by the Facility in such year.
Output Requirement. Starting the first full calendar year after the Commercial Operation Date of the Facility, for each year during the Delivery Period, Seller shall deliver to Buyer no less than seventy percent (70%) of the Expected Annual Output averaged over two consecutive calendar years on a rolling basis during the Delivery Period (the “Net Output Requirement”). Where a Permitted Excuse to Perform adversely affects actual generation output of the Facility, the Net Output Requirement shall be reduced by the amount of Energy not generated due to the Permitted Excuse to Perform; provided, however, Seller agrees that it must demonstrate to Buyer, in ▇▇▇▇▇’s Commercially Reasonable discretion, that the Facility’s generation output was actually reduced due to a Permitted Excuse to Perform. ▇▇▇▇▇’s sole remedy for Seller’s failure to deliver the Net Output Requirement for any period of two consecutive years shall be to receive a credit against the Contract Price for each month during the immediately following full calendar year. The foregoing monthly credit to Buyer shall be determined by (a) multiplying (i) the difference between the Net Output Requirement and the actual Energy (expressed in MWh) delivered by Seller and received by Buyer during the applicable period by
Output Requirement. Starting the first full calendar year after the Commercial Operation Date of the Facility, for each year during the Delivery Period, Seller shall deliver to Buyer no less than seventy percent (70%) of the Expected Annual Output averaged over two consecutive calendar years on a rolling basis during the Delivery Period (the “Net Output Requirement”). Where a Permitted Excuse to Perform adversely affects actual generation output of the Facility, the Net Output Requirement shall be reduced by the amount of Energy not generated due to the Permitted Excuse to Perform; provided, however, Seller agrees that it must demonstrate to Buyer, in ▇▇▇▇▇’s Commercially Reasonable discretion, that the Facility’s generation output was actually reduced due to a Permitted Excuse to Perform.