Output Contract


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Output Contract

In the law of sales, an agreement in which one party assents to sell his or her total production to another party, who agrees to purchase it.

This type of contract does not entail an illusory promise, a purported agreement that actually means nothing because it leaves to one party the choice of performance or nonperformance, even if the quantity of goods that are the subject of the contract is indefinite. It is also known as an entire output contract, and it is subject to the Uniform Commercial Code, a body of law adopted by the states that governs commercial transactions.

Cross-references

Requirements Contract.

output contract

n. an agreement in which a producer agrees to sell its entire production to the buyer, who in turn agrees to purchase the entire output, whatever that is. Example: an almond grower has a "home" for his output, and the packer of nuts is happy to have a sure-fire supply, even though it may have to store away a glut.

References in periodicals archive ?
The producer producesunder output contract C that specifies fixed output price p and contracted quantity [??] where [??] is chosen by the producer.
"Musanada has also introduced output contracts, which are accepted as best-practice technically and economically," says Al Balooshi.
Industrial output contracted by 0.8 per cent in April, the first decline in three months, due to drastic fall in capital goods production and manufacturing activities.
At any rate, there is every reason to expect consumption from these countries to decline as economic output contracts.
IHS chief UK and European economist Howard Archer said manufacturing output contracted in the third and second quarters of 2015, and latest official data shows that output fell 0.4% month on month in October.
Data released last week showed that both German industrial orders and output contracted in the third quarter, a cause for concern for business groups which urged the government to take measures to boost public and private investment.
The country's manufacturing output contracted 3.6 percent at end-June, according to the preliminary results of the Monthly Integrated Survey of Selected Industries (Missi), while exports were also down 4.7 percent in first-half.
First-quarter gross domestic product estimates range between a 0.8 per cent and 1.2 per cent annual pace, setting up what could be a replay of sorts of 2014, when output contracted sharply before rebounding strongly.
The rate dropped to 7.78 per cent earlier, the lowest level for benchmark 10-year debt since July 2013, amid speculation the central bank will cut borrowing costs after inflation slowed and factory output contracted. India's consumer price index increased 4.38 per cent in November from a year earlier, the least since the gauge was created in early 2012, and industrial production fell the most in three years, official data showed after financial markets closed on December 12.
Saudi Arabia's output contracted by 3.1 per cent during Q2, partly thanks to falling exports and tighter government spending.
* Saudi Arabia's output contracted by 3.1 per cent during the second quarter of the year (Q2), partly thanks to falling exports and tighter government spending.