Off-take Contract

An off-take contract is a type of commercial contract that regulates transactions for the sale of goods or raw materials that have not yet been produced.

It is concluded between the manufacturer or supplier of goods/materials on the one hand and its buyer (offtaker) on the other.

The meaning of the Off-take Contract is that a certain batch of the product is made for a specific order for a specific buyer and is booked in advance. The contract fixes the mutual obligations of the seller and the buyer: the first undertakes to produce and supply the agreed volume of goods / raw materials by a certain time, and the second undertakes to buy this volume at a certain price.

An off-take contract is essentially an agreement to finance the production of a product. It often includes a take-or-pay obligation, which stipulates that the buyer undertakes to pay for the produced batch of goods / raw materials if, for any reason, refuses to buy it.

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