Although the contracts appear to deliver price protection in a straightforward manner, in fact the advantage to MGRM’s customers was more roundabout. A familiar problem with long-term fixedprice contracts is that the protection offered on one side of the contract creates its own financial squeeze on the other side; that is, when the contract is deep in the money for the seller, the buyer may in fact be forced into default or at least a renegotiation of the terms. To minimize this danger, MGRM limited the annual volume supplied under contract to no more than 20% of the customer’s needs. Of course, this also minimized the degree to which MGRM’s contract would resolve the squeeze on a retailer during a period of high spot prices.