BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Agree to purchase some of a particular producer’s production
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Agree to purchase none of a particular producer’s production
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Agree to purchase all of a particular producer’s production
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Do not agree to buy anything
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Detailed explanation-1: -Primary tabs. An output contract is a type of contract common to agriculture or energy law where a buyer agrees to buy the seller’s entire output of some agreed-upon product or service; also known as an entire-output contract.
Detailed explanation-2: -Under a requirements contract, the customer is obligated to purchase its entire requirements of goods exclusively from the supplier. A requirements contract differs from an output contract under which the customer is obligated to purchase the supplier’s entire output of the goods.
Detailed explanation-3: -For example: Company A produces 10, 000 paper clips per year. Company B would like to purchase paper clips from Company A. The parties agree that Company B will purchase all 10, 000 paper clips that Company A produces this year. This is an output contract.
Detailed explanation-4: -Today, requirement and output contracts are enforceable because the parties to the contracts do, in fact, limit their options. If the buyer in a requirement contract wants to buy any of the product in the contract, he must buy it from the seller.