Take or Pay

Filed Under »

	Definition of 'Take or Pay' A provision, written into a contract, whereby one party has the obligation of either taking delivery of goods or paying a specified amount.
	Investopedia explains 'Take or Pay' This is used in some contracts as a method to ensure that the transaction occurs. For example, a Banana farmer will enter into a take or pay contract with a fruit retailer so that the retailer will buy all the bananas from the farmer or pay a provision for not buying them.

Related Definitions

Municipal Bond

A debt security issued by a state, municipality or county to finance its capital expenditures. Municipal bonds are exempt from federal taxes and from most state and local taxes, ...
Read More »
Whoops

Slang for the Washington Public Power Supply System (WPPSS), which made the record books with the largest municipal bond default in history.
Read More »
Obligation

The legal responsibility to meet the terms of a contract. If the obligation is not met there is often recourse for the other party to the contract.
Read More »

How Companies Use Derivatives To Hedge Risk

Derivatives can reduce the risks associated with changes in foreign exchange rates, interest rates and commodity prices.
Read More »
An Introduction To Managed Futures

Their inverse correlation with stocks and bonds make these alternative investments worth getting to know.
Read More »
The Barnyard Basics Of Derivatives

Follow this tale of a fictional chicken farm to learn how derivatives work in the market.
Read More »
- How To Invest In Commodities
  
  Find out which futures, options, or funds will be your perfect commodity portfolio fit.
  Read More »
- A Review Of Past Recessions
  
  Here we look at the biggest economic declines in the U.S. since the Great Depression.
  Read More »

Disbanding The Euro	Is Bank Of America In Danger?		The Greatest Currency Trades Ever Made	The Enron Collapse: A Look Back
	Day Trading Strategies For Beginners	The Biggest IPO Flops	How HELOCs Can Hurt You