The Costly World of Industrial Gas Contracts

If you’re in the business of purchasing gases, like industrial nitrogen or industrial hydrogen, you’re all too familiar with the absurdity of industrial gas prices and contracts. The price increases, the expensive contracts and the difficulty of getting out of said

contracts can all cause quite the headache. Especially when the

pressure is on and and running out of industrial oxygen means

production is on hold.

Although you’re at the mercy of industrial gas companies, there are

ways to protect yourself and, more importantly, your business.

 

What to Look Out for in Industrial Gas Contracts

Contracts themselves can be the biggest concern for anyone in the business of buying industrial gases. The contract is generally written to protect the seller and not the buyer. Most gas contracts involve equipment that the gas supplier owns. Getting out of these contracts can, in some cases, cost thousands of dollars if it is a gas supplier agreement without any modifications to the agreement.

Another common concern are evergreen contracts with auto renewal. Often times, you’re agreeing to another long contract which may not be the best move for your business at a given time.

Clauses

Clauses built into the the contract can be beneficial for both the buyer and seller, when written correctly. Contracts that don’t include an “out-clause” can be really detrimental to buyers, who will sometimes find themselves in agreements that last up to seven years.

Agreements can also include clauses that the seller is the only one who can remove their tank at the buyer’s expense in the event of termination.

How to Resolve These Issues

Fortunately, how the agreement is written can resolve many of these problems. It’s important to review the contract carefully. You and your team will want to be sure to remove any language that could potentially cost thousands of dollars. 

The industrial gases industry is thriving and so are the contracts, just be sure that you and your business are protected before signing on the dotted line! 

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