LawWiki
HomeCodesSearchGlossaryAPIAbout
LawWiki

Plain English summaries of California law with zero-hallucination AI. Every summary is verified against official source text.

Product

  • Search
  • Codes
  • About

Legal

  • Privacy Policy
  • Terms of Service
  • Disclaimer

© 2026 LawWiki. All rights reserved.

HomeCommercial CodeDiv. 2Ch. 3§ 2306 Output And Requirements Contracts

§ 2306 Output And Requirements Contracts

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 2306 Output And Requirements Contracts

Key Takeaways

  • •If a deal says the seller gives 'all they make' or the buyer takes 'all they need,' both sides must act fairly and not ask for way too much or too little.
  • •If a seller or buyer agrees to only work with each other, the seller must try hard to provide the goods, and the buyer must try hard to sell them.
  • •You can't suddenly ask for 100 times more stuff than usual if the deal doesn’t say that’s okay.

Example

A bakery agrees to buy all its flour from one mill, and the mill agrees to sell only to that bakery.

The mill must try its best to give the bakery enough flour, and the bakery must try its best to sell the flour it gets. Neither can suddenly change the amount in a crazy way, like the bakery asking for 1000 bags one week when it usually only needs 10.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 2306 Output And Requirements Contracts

(1) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded. (2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale. (Enacted by Stats. 1963, Ch. 819.)

Last verified: January 23, 2026

Key Terms

good faithunreasonably disproportionatebest effortsexclusive dealing

Related Statutes

  • § 1302 Contractual Modification Limits
  • § 1304 Good Faith Contract Obligation
  • § 1309 Good Faith Acceleration Rights
  • § 2311 Contract Performance Specifications
  • § 10301 Lease Contract Enforcement

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 2306.
View Official Source