Overfill and Shortage Clause

OVERFILL/SHORTFILL CLAUSE

This Overfill/Shortfill Clause (hereinafter referred to as the Clause) forms part of the Agreement identified below and is entered into between _[party 1]_ and _[party 2]_ (each a Party and together, the “Parties”).

WHEREAS:

A. The Parties have agreed to enter into an Agreement (the Agreement) for the purchase and sale of goods as set out more particularly therein.

B. The Parties have agreed that in the event of any overfill/shortfill in relation to the Goods, the relevant Party shall be liable for a proportionate share of the amount of such overfill/shortfill.

NOW THEREFORE, the Parties hereby agree as follows:

1. Definitions

1.1 In this Clause the following definitions shall apply:

(a) “Goods” means the goods subject to the Agreement;

(b) “Overfill” means the delivery of Goods more than the quantity ordered in the Agreement;

(c) “Shortfill” means the delivery of Goods fewer than the quantity ordered in the Agreement;

(d) “Liability” means any damage, injury or any other loss, suffered by either Party due to the Overfill/Shortfill.

2. Overfill/Shortfill

2.1 Should either of the Parties be responsible for an Overfill or Shortfill, the other Party may raise a claim for Liability.

2.2 In such circumstances, the Parties shall negotiate in good faith in order to determine the amount of Liability due to the other Party.

2.3 The Parties recognize that each shall be responsible for a proportionate share of any Liability that is established as a result of an Overfill/Shortfill.

2.4 The Party that is responsible for an Overfill/Shortfill shall reimburse the other Party for all reasonable costs, expenses and losses incurred, including (without limitation) any additional costs arising from delays and damages related to the Overfill/Shortfill.

3. Representations and Warranties

3.1 Each of the Parties hereto represents and warrants that it has full power and authority to enter into this Clause and to perform its obligations hereunder.

4. Governing Law

4.1 This Clause shall be governed and construed in accordance with the laws of _[governing law]_.

5. Confidentiality

5.1 The Parties undertake to keep all information received from the other Party in connection with the Agreement and this Clause confidential and not to disclose such information to any third party without their prior written consent.

6. Entire Agreement

6.1 This Clause and the Agreement constitutes the full and entire agreement between the Parties with respect to the subject matter herein.

7. Counterparts

7.1 This Clause may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

IN WITNESS THEREOF, the Parties hereto have executed this Clause and each counterpart thereof as of the date first set forth above.

_[Party 1]_

By: __________________

Name: ________________

Title: _______________

_[Party 2]_

By: __________________

Name: ________________

Title: _______________

OVER OR UNDER DELIVERY CLAUSE

This clause governs the obligations of the buyer and the seller when there is an over delivery or an under delivery of goods as a result of the contract.

If it is an over delivery, the buyer has the option to either refuse to accept the additional goods, or accept them on the conditions that it would not be liable to pay for them. If the buyer exercises the option to accept the additional goods, it is then at liberty to either pay for the same at the rate specified in the contract, or dispose of them at his/her own discretion.

In the event of an under delivery, the buyer is entitled to receive the amount that was short supplied, plus any damages incurred as a result of the deficiency. The seller is liable to make good the deficiency in the quantity of goods delivered, either through supply of another lot of goods or cash payment, whichever is mutually agreed between the buyer and the seller.

The parties are also entitled to pursue legal action in the event of a breach in the contract, in terms of over delivery or under delivery. The legal charge must be brought within one month after having known, or ought to have known, of the nature of the breach that occurred.

The parties must bear in mind that use of this clause will not be applicable if the over delivery or the under delivery was caused due to any unforeseen circumstances out of the control of either party