This clause requires you to constantly update and submit predictions about your future needs or spending (usually quarterly or monthly) for the next 12-24 months. The other party can then use these forecasts to plan their own business and may hold you accountable if your actual usage differs significantly from what you predicted. This matters because forecasts are often inaccurate, and the other party might claim you breached the contract if reality doesn't match your predictions. In practice, this shifts business risk onto you—you become responsible for guessing the future accurately.
Insist on adding language that says forecasts are "estimates only" and not binding commitments, and that you can revise them if circumstances change. Also negotiate a tolerance band—for example, you're only liable if your actual usage differs by more than 10% from your forecast, not for small variations. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires you to constantly update and submit predictions about your future needs or spending (usually quarterly or monthly) for the next 12-24 months.
Why should I care about this clause?
The other party can then use these forecasts to plan their own business and may hold you accountable if your actual usage differs significantly from what you predicted.
What are my options?
This matters because forecasts are often inaccurate, and the other party might claim you breached the contract if reality doesn't match your predictions.
How does this affect small businesses?
In practice, this shifts business risk onto you—you become responsible for guessing the future accurately.