BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -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: -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-3: -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-4: -An output contract is an agreement where one party agrees to purchase the entire production that the other party supplies. Thus, the buyer will buy all the ‘output’ the seller makes.

Detailed explanation-5: -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.