What is a Requirements Contract?

• A. A contract to supply a fixed, specific quantity no matter what
• B. A promise to fulfill all the requirements a party has of a certain item
• C. A contract that fixes the price for a term
• D. A contract for services rendered

Answer: (B)

A requirements contract is an agreement under the UCC where one party promises to supply all of the buyer’s needs for a specific good over a set period. The quantity isn’t fixed in advance; it depends on the buyer’s actual requirements during that time. The seller agrees to provide what the buyer needs in good faith, and the amount can vary with production or usage. This setup is efficient for ongoing relationships because it avoids locking in a hard quota while still ensuring a reliable supply.

This concept contrasts with a contract that fixes a specific quantity regardless of need, a contract that only fixes the price for a term, or a contract for services rather than goods.