VATLP02920 | Supply: Overage payments: Overage provisions

Typical elements of an overage provision

Overage provisions may take various forms and are not all necessarily set out in a single separate clause. They can contain several elements, and these elements may not always all be present in every instance. You may find the following elements included in overage provisions, but this is not an exhaustive list:

• The events that will trigger the overage

• how the overage is to be calculated

• how the seller will secure the overage agreement (if applicable)

• to whom the overage payment is to be made

Satisfaction of an overage obligation

This will occur when the payment of the overage has taken place in accordance with the contract.