"Obligation to Buy" in business contracts.

[Kross]

Some business contracts are always with the term, "Obligation To Buy". It is mostly used in contracts where something is rented out.

What is the implication of "Obligation to Buy" term in a business contract? Is it possible that it won't be kept dependent on conditions?

 

[Fidelia]

When there is an obligation to buy and the party doesn't end up honouring that obligation, there is always a fee to pay for that failure.

 

[eLdavis]

It means buying is not an option here, but the person actually has to buy, and if they don't, there is a penalty for it.

 

[Kera]

A clause of obligation to buy is very dicey. What if the equipment doesn't work the way you wished it to. And you have already signed the contract with obligation to buy.