take-or-pay contract

Definition

Agreement between a buyer and seller in which the buyer will still pay some amount even if the product or service is not provided.

Use this term in a sentence

You may want to enter into a take-or-pay contract so that you know you will at least get something for your time.

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It is typically in the seller's interest to use a take-or-pay contract when providing contingent services that may or may not happen.

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It was a take-or-pay contract and that meant that the person would still pay for the service even if it was not provided and that was crazy.

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take-home pay contract