Capacity / Reservation Agreement: Template and How to Draft One (2026)

What a capacity or reservation agreement is A capacity reservation agreement is a contract in which a customer pays a supplier to set aside a defined amount of production, service or infrastructure capacity, so that the customer can draw on it when needed. The customer is not only buying units of output; it is buying the right and the certainty that the capacity will be there. You see these agreements in manufacturing and semiconductors, where a buyer reserves wafer or line capacity; in logistics, where a shipper reserves space; in power and gas, where a user reserves transmission or storage; in cloud and data centres, where a tenant reserves compute or rack space; and in services, where a client reserves a team's time. The reason to reserve is scarcity and lead time. When capacity is tight or takes a long time to build, the supplier wants commitment before it commits its own resources, and the customer wants a guarantee it will not be shut out. The reservation fee is the price of that mutual certainty. This page is general information, not legal advice. Capacity contracts carry real financial commitment and interact with supply, competition and sometimes regulatory rules, so have a qualified professional review a live deal. ## How these agreements are usually structured - Reservation fee plus usage price. The customer pays a standing fee to hold the capacity, then a separate price for what it actually uses. This is the most common shape.

• Take-or-pay. The customer must use, or pay for, a minimum volume each period, whether or not it draws it.
• Right of first call. The customer gets priority access to capacity up to a limit, but pays mainly for what it uses, with a smaller or no standing fee.
• Firm versus interruptible. Firm capacity is guaranteed; interruptible capacity is cheaper but can be curtailed when the supplier is constrained. ## A capacity reservation agreement template you can copy ``` CAPACITY RESERVATION AGREEMENT Date: [date] Supplier: [legal name, address] ("Supplier") Customer: [legal name, address] ("Customer") 1. RESERVED CAPACITY Supplier reserves for Customer [amount and unit of capacity, for example X units per month / Y rack units / Z MW] of [the facility / line / service] described in Schedule 1 (the "Reserved Capacity"), [firm / interruptible]. 2. TERM This agreement runs from [commencement] for [term], and [renews on notice / expires]. [Ramp-up or build-out schedule, if any, in Schedule 1.] 3. RESERVATION FEE Customer pays a reservation fee of [amount] per [period] to hold the Reserved Capacity, whether or not it is used, invoiced [monthly / quarterly] and due within [number] days. 4. USAGE AND PRICING Customer may draw up to the Reserved Capacity. Usage is priced at [amount] per [unit]. [Overuse above the reservation is priced at / not permitted without consent.] 5. MINIMUM COMMITMENT / TAKE-OR-PAY Customer commits to take or pay for at least [minimum] per [period]. Any shortfall is [charged at the reservation rate / carried forward within [make-up period]]. 6. AVAILABILITY AND SERVICE LEVELS Supplier will make the Reserved Capacity available [service level, uptime or lead time]. If Supplier fails to meet it, Customer's remedy is [service credit / fee reduction / termination right] as in Schedule 2. 7. PRIORITY AND ALLOCATION During shortage, Reserved (firm) Capacity has priority over interruptible users. Supplier will not reserve the same capacity to others in a way that prevents Customer drawing its Reserved Capacity. 8. FORECASTING AND NOMINATIONS Customer provides a [rolling forecast / nomination] [number] days ahead as in Schedule 3, so Supplier can plan. [Flexibility band around the forecast.] 9. CHANGES, EXPANSION AND TRANSFER [How Customer may increase or decrease the reservation; whether Customer may transfer or resell unused capacity; notice required.] 10. TERM, TERMINATION AND EXIT Either party may end this agreement on [notice] or for material breach not cured within [number] days. On termination, [outstanding fees / return of equipment / data egress]. 11. LIABILITY, FORCE MAJEURE, GOVERNING LAW [Liability cap and carve-outs]; [force majeure]; governing law is [jurisdiction]; disputes go to [arbitration / courts]. SCHEDULES

1. The facility and reserved capacity 2. Service levels and remedies
2. Forecasting and nominations SIGNED for Supplier ____________ SIGNED for Customer ____________

- Reservation fee with no priority. Paying to reserve capacity that the supplier can give to someone else first is paying for nothing.
- No service level or remedy. An availability promise with no consequence for failure gives the customer no leverage.
- Take-or-pay with no make-up. A minimum commitment with no right to use the paid-for volume later is simply a penalty.
- Silence on exit. For data and cloud deals especially, say how the customer gets its data or equipment out at the end, and what it costs. ## Keeping a capacity agreement under control A capacity reservation is a commitment that runs for months or years and moves with forecasts, expansions, service-credit claims and renewals. The work that outlasts signing is keeping the schedules and nominations consistent, spotting a clause that lets the supplier overcommit your reserved capacity, and knowing which service levels are in force. Drafting from a clean template, flagging a one-sided term, editing a clause in plain language, and holding every version with its date can live in one AI workspace tuned to how your company contracts. [Adira](https://adiralaw.com) is built around that single-workspace idea for business contracts. For a simple reservation the template above is enough; the point worth keeping is that a contract and its schedules are easier to trust when they stay in one place and in step.