Take or Pay

(redirected from Take-or-Pay Contracts)

Take or Pay

An agreement between two parties where one agrees to either buy certain goods or services from the other on a certain date or to pay for them even if that party does not need them on that date. A take-or-pay agreement provides guaranteed revenue for the seller even if the buyer decides against actually purchasing the goods or services. It is common in transactions involving electric utilities.
References in periodicals archive ?
The power is sold pursuant to long-term take-or-pay contracts with the participating municipal electric utilities.