Offtake Agreement: Template and How to Draft One (2026)

What an offtake agreement is An offtake agreement is a contract in which a buyer, the offtaker, agrees in advance to purchase a producer's future output, often before the producer has built the plant or mine that will make it. The producer gets a committed buyer for years of production; the offtaker gets a secured source of supply, usually at an agreed price or pricing formula. You see offtake agreements in mining, oil and gas, renewable energy, battery materials, agriculture and chemicals, anywhere a long-lived asset needs certainty of sales before anyone will fund it. The reason these contracts matter so much is financing. A bank or investor deciding whether to fund a new mine or a solar farm wants to know the output can be sold. A strong offtake agreement with a creditworthy buyer is often the document that turns a project from an idea into something a lender will back. That is why the offtake is negotiated early and scrutinised hard. This page is general information, not legal advice. Offtake contracts carry long-term price, delivery and credit risk and sit alongside project-finance and security documents, so have qualified advisers review a live deal. ## The common structures - Take-or-pay. The offtaker must either take the agreed volume or pay for it anyway. This gives the producer and its lenders the most certainty and is common in project finance.

• Take-and-pay. The offtaker pays only for what it actually takes, up to an agreed volume. Softer on the buyer, weaker security for the producer.
• Fixed, floating or floor pricing. Price can be fixed, linked to a published market index, or set at a market price subject to a floor that protects the producer's economics.
• Percentage of production. The offtaker takes an agreed share of whatever the asset produces, sharing volume risk with the producer. ## An offtake agreement template you can copy ``` OFFTAKE AGREEMENT Date: [date] Producer: [legal name, address] ("Producer") Offtaker: [legal name, address] ("Offtaker") 1. SALE AND PURCHASE Producer agrees to sell and Offtaker agrees to [take-or-pay / take-and-pay] the Product described in Schedule 1, on the terms below. 2. PRODUCT AND SPECIFICATION The Product is [description] meeting the specification in Schedule 1. Product failing spec is [rejected / priced on a sliding scale per Schedule 1]. 3. QUANTITY Contract quantity is [volume] per [period], being [fixed / a percentage of production / up to a maximum]. [Ramp-up schedule, minimum and maximum quantities, and any flexibility band.] 4. TERM This agreement runs from [commercial operation date / first delivery] for [term] years, and [renews / expires]. [Conditions precedent, for example project financing or permits, in Schedule 2.] 5. PRICE The price is [fixed amount / a formula linked to [index]] [subject to a floor of [amount] and a cap of [amount]]. Price is reviewed [terms]. Currency is [currency]. 6. DELIVERY Delivery is [Incoterm and point], title and risk passing on [event]. Delivery schedule and nomination procedure are in Schedule 3. 7. TAKE-OR-PAY / SHORTFALL If Offtaker takes less than [committed volume] in a period, Offtaker pays [the shortfall amount] and may make up the volume within [make-up period]. If Producer delivers less than committed, Producer [credits / sources replacement / pays]. 8. PAYMENT AND SECURITY Offtaker pays within [number] days of [invoice / delivery]. Credit support: [parent guarantee / letter of credit / none]. Producer's security obligations to its lenders are acknowledged in clause 12. 9. MEASUREMENT AND QUALITY TESTING Quantity and quality are measured at [point] using [method]; disputes go to an independent inspector whose finding is [binding]. 10. FORCE MAJEURE AND CHANGE IN LAW [Events]; relief is [suspension of obligations]; prolonged force majeure over [period] allows [termination]. 11. DEFAULT, TERMINATION AND STEP-IN Events of default: [list]. On default the other party may [remedies]. Lenders may have step-in and assignment rights under clause 12. 12. ASSIGNMENT AND FINANCING Producer may assign this agreement and its receivables to its lenders as security; Offtaker agrees to [acknowledge / enter a direct agreement]. 13. DISPUTES AND GOVERNING LAW Disputes go to [arbitration / courts]; governing law is [jurisdiction]. SCHEDULES

1. Product and specification 2. Conditions precedent
2. Delivery and nominations 4. Pricing detail SIGNED for Producer ____________ SIGNED for Offtaker ____________

- Index with no fallback. If the named index is discontinued and there is no replacement mechanism, the pricing clause can break.
- Weak offtaker credit, no support. A take-or-pay promise is only as good as the offtaker. Without a guarantee or letter of credit, lenders discount it.
- Vague specification. Off-spec product with no agreed price adjustment or rejection process leads to disputes on every shipment.
- No force majeure relief tied to the asset. A producer hit by an outage still owing full delivery can be ruined by its own offtake. ## Keeping an offtake agreement under control An offtake agreement is a living instrument across many years. Prices re-index, volumes ramp, conditions precedent fall away, lenders ask for direct agreements and amendments. The work that outlasts signing is keeping the schedules and side letters consistent, spotting a clause that shifts price or volume risk onto you, and always knowing which version is 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 purchase commitment the template above is enough; the point worth keeping is that a long-term contract and its many schedules are easier to trust when they stay in one place and in step.