Additional purchases: Overview, definition, and example
What is additional purchases?
Additional purchases refer to any extra goods, services, or items that are bought beyond the original agreement or contract. These purchases can occur when one party decides to buy more of a product or service than initially agreed upon, or when they want to add something extra to their original order.
For example, if a business signs a contract for the purchase of 100 units of a product and later decides to buy another 50 units, those extra 50 units would be considered additional purchases.
Why are additional purchases important?
Additional purchases are important because they can impact the cost, scope, and timeline of a project or agreement. Businesses may want to include a clear clause on additional purchases in their contracts to avoid confusion or disagreements about costs and expectations.
In some cases, additional purchases may be anticipated, while in others they could be unplanned. Having a clear understanding of how additional purchases will be handled can help both parties avoid disputes and manage expectations.
Understanding additional purchases through an example
Imagine a software development company signs a contract to build a website for a client. The contract includes the creation of 10 pages. However, halfway through the project, the client decides they want an additional 5 pages added. These extra pages would be considered additional purchases and should be addressed in the contract, including how much they will cost and how the timeline might change.
Another example could be a wholesale supplier who sells a set quantity of items to a retailer. The retailer may later decide to buy more units, increasing the total quantity. These additional items would be regarded as additional purchases, and both the supplier and retailer should agree on any revised terms.
An example of an additional purchases clause
Here’s how a clause regarding additional purchases might appear in a contract:
“Any additional purchases beyond the original scope of this Agreement shall be subject to mutual agreement by both parties and may result in changes to the cost and delivery schedule.”
Conclusion
Additional purchases allow businesses the flexibility to adjust and expand their orders, but it’s important to clearly outline how these purchases will be handled in the contract. By addressing them upfront, businesses can prevent misunderstandings and ensure that any extra costs or changes are agreed upon and managed effectively.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.