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Requirements Contract
I need a requirements contract for a supplier to provide materials on an as-needed basis, with flexible delivery schedules and pricing adjustments based on market fluctuations. The contract should include a minimum purchase obligation, quality assurance standards, and a termination clause with a 30-day notice period.
What is a Requirements Contract?
A Requirements Contract binds a buyer to purchase all needed quantities of specific goods or services exclusively from one supplier. Under Swiss law, these agreements are particularly common in manufacturing and distribution, where businesses need reliable access to materials or products while maintaining flexibility in order volumes.
The contract gives suppliers more predictable demand forecasting, while buyers often receive better pricing and priority access. Swiss courts generally enforce these agreements when they include clear terms about minimum purchase obligations, pricing mechanisms, and delivery schedules. However, they carefully examine any restrictions on competition, especially for longer-term exclusive arrangements.
When should you use a Requirements Contract?
Requirements Contracts work best when your business needs a steady, reliable supply of specific materials or services. For example, Swiss manufacturing companies use these agreements to secure critical components, while hotels might lock in guaranteed food deliveries from suppliers. They're especially valuable during market volatility or when dealing with hard-to-source items.
Consider this arrangement when you need to negotiate better bulk pricing, ensure priority access during shortages, or streamline your procurement process. Swiss companies often implement Requirements Contracts for strategic supplies where running out could halt operations or when building long-term supplier partnerships that require mutual commitment.
What are the different types of Requirements Contract?
- Basic Supply Requirements: Most common type where buyers commit to purchase all needed quantities from one supplier, typically including minimum purchase volumes and pricing tiers
- Output Requirements: The supplier agrees to sell their entire production output to a single buyer, common in Swiss agricultural and manufacturing sectors
- Flexible Volume Agreements: Include variable quantity ranges with guaranteed minimums, letting buyers adjust orders within specified boundaries
- Exclusive Distribution Requirements: Combine requirements obligations with territorial exclusivity, popular in Swiss regional distribution networks
Who should typically use a Requirements Contract?
- Manufacturing Companies: Often serve as buyers in Requirements Contracts, securing steady supply of raw materials or components for production lines
- Suppliers and Distributors: Provide guaranteed supply commitments, typically offering volume-based pricing and priority delivery terms
- Legal Counsel: Draft and review agreements to ensure compliance with Swiss competition law and proper risk allocation
- Procurement Officers: Negotiate terms, monitor compliance, and manage ongoing supplier relationships
- Quality Control Teams: Verify that delivered goods meet specified standards and handle any compliance issues
How do you write a Requirements Contract?
- Supply Requirements: Document exact quantities needed, delivery schedules, and any seasonal fluctuations in demand
- Pricing Structure: Define base prices, volume discounts, and adjustment mechanisms for market changes
- Quality Standards: Specify product specifications, quality control procedures, and acceptance criteria
- Delivery Terms: Outline delivery locations, timeframes, and responsibilities for transportation costs
- Duration and Termination: Set contract length, renewal options, and conditions for early termination
- Compliance Check: Review Swiss competition laws to ensure the agreement doesn't create illegal market restrictions
What should be included in a Requirements Contract?
- Parties and Capacity: Full legal names, addresses, and authority of signatories under Swiss law
- Quantity Terms: Clear definition of purchase obligations and how requirements are calculated
- Exclusivity Provisions: Scope and limitations of exclusive purchasing commitments
- Price Mechanisms: Fixed prices or adjustment formulas compliant with Swiss contract law
- Performance Standards: Quality specifications, delivery terms, and acceptance criteria
- Duration and Termination: Contract period, renewal options, and grounds for early termination
- Dispute Resolution: Choice of Swiss law, jurisdiction, and arbitration procedures
What's the difference between a Requirements Contract and a Sales Contract?
Requirements Contracts are often confused with a Sales Contract, but they serve distinctly different purposes in Swiss commercial law. While both govern the sale of goods, their core functions and commitments differ significantly.
- Purchase Commitment: Requirements Contracts bind buyers to obtain all needed quantities from one supplier, while Sales Contracts typically cover specific, predetermined quantities
- Duration: Requirements Contracts usually establish ongoing relationships with flexible volumes, whereas Sales Contracts often cover single or discrete transactions
- Price Structure: Requirements Contracts frequently include volume-based pricing tiers and long-term price adjustment mechanisms, while Sales Contracts typically set fixed prices
- Exclusivity: Requirements Contracts mandate exclusive purchasing from the designated supplier, but Sales Contracts rarely include exclusivity provisions
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