Balance of contract

Balance of contract is a term used in the retail industry. Retailers contract with their suppliers to supply a quantity of product in a specified time period to a specific location at an agreed price. The retailer "calls off" the production of the product to match the expected or actual sales curves, depending on the stage in the life-cycle of the product. At any one point in the life-cycle of the product, the "balance of contract" is the undelivered portion of the contract to which the retailer is committed in the future.