Competitive Pricing
(Meet or Release) Clauses

Summary

These clauses, known as "meet-or-release" competition, release a buyer from its purchase obligations or allow it to terminate the agreement if the buyer can secure better pricing for the same or similar goods from a third party, which pricing the seller fails to meet. This template includes practical guidance and drafting notes. A meet or release clause, also known as a competitive price clause, benefits the buyer in a sale transaction. Such clauses generally provide the supplier with the option to match the more favorable pricing terms on which the buyer is able to purchase the subject goods from another source. The buyer's rights in the event the supplier elects not to meet the lower pricing can vary and will usually relate to the nature of the subject sales agreement. For example, if the agreement only calls for the supply of a single product, the buyer should have the right to terminate the agreement in its entirety without liability. If the seller will be furnishing multiple products and the competitive pricing does not relate to all the items, the buyer will usually have the right to purchase those specific items from the third party, while the agreement will remain in place for the unaffected items. Additionally, if the sales agreement imposes obligations on the buyer to purchase designated quantities of goods, any goods acquired at a lower price from another source can be deducted from the buyer's purchase obligations. For a full listing of related supply of goods content, see Supply of Goods Resource Kit. For additional guidance, see Price Considerations.