Offtake agreements are usually starting or paying contracts that require the buyer to pay regularly for the products, whether or not the Offtaker actually accepts the products. Offtake agreements are common in project management, particularly with regard to project financing. While taketake agreements have many benefits for both producers and buyers, it is important to note that there are also risks associated with them. How you approach your potential buyer is also crucial. The best approach is a business or personal recommendation. If someone you know knows an influential leader at the destination buyer, then ask them to make a written introduction. It is also important to know what is in the written reference. To account for events that cannot be taken into account, most offtake agreements contain a force majeure clause that allows both parties to amend or terminate the offtake contract if something happens that causes the party to be unknowable and beyond anyone`s control. Force majeure protects against catastrophic damage caused by things such as God`s actions, fires, floods or natural disasters. This video from Altech Chemicals Ltd. explains why an acquisition agreement is important for project financing. Once you have opened the conversation, you can develop a relationship with the Offtaker.
Ask them for their membership in business groups. Extensive research gives you the answers to the questions you ask. If you know, for example, that the person is the current president of a group of companies that represent companies that are involved in the product you are going to produce, you ask, „I heard that the National XYZ Association is working on issues related to our product.“ The answer will let you know that he or she is a member who has a leading role. Traps, if you don`t set your price and the time has just executed a formal sales contract and your offtaker refuses your price, you lose valuable time trying to find another off-program, or you lose revenue by accepting a price below your pro forma value. Therefore, if a potential lender asks you for your buyer`s annual accounts, you refuse this request and find another lender. This will save you a lot of time and you will find a lender that is interested in you, not your speedboat. An acquisition agreement is essentially a binding contract between a company that produces a specific resource and a company that must purchase that resource. It formalizes the buyer`s intention to purchase a certain amount of the manufacturer`s future production. A taketake agreement is an agreement that a manufacturer hands over with a buyer.