Seller’s Cover Costs - EFET Allowance Provision: Difference between revisions

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Latest revision as of 10:58, 19 October 2023

2007 EFET General Agreement
Version 2.1(a) (Power)

A Jolly Contrarian owner’s manual™

8.2(b) in a Nutshell

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8.2(b) in all its glory

(b) Seller’s Cover Costs. In the event that the Buyer fails to accept Transfer of all or any portion of a Contract Quantity as required by § 8.2(a) (Two Business Days Grace Period) in accordance with the terms of an Allowance Transaction and the Seller has not agreed to a Deferred Acceptance Date as provided for in § 8.2(c) (Seller’s Right to Waive Its Cover Costs), the Buyer shall incur the obligation to pay the Seller, as compensation for its failure to accept Transfer of the Allowances, an amount (hereinafter “Seller’s Cover Costs”) equal to the sum of:
(i) the price, if any, less than the portion of the Total Contract Price applicable to the Allowances not accepted by the Buyer, which the Seller, acting in a commercially reasonable manner either did, or would have been able to, receive, in an arm’s length transaction with a third party or parties, from the resale of the Allowances not accepted by the Buyer;
(ii) such reasonable additional incidental costs as the Seller incurred in attempting to make or making such resale of the Allowances; and
(iii) interest accrued during the two Delivery Business Day grace period as provided in § 8.2(a); plus interest, at the Interest Rate specified in § 13.5 (Default Interest), accrued from (and including) the first Delivery Business Date following the Delivery Date, to (but excluding) the date of receipt by the Seller of damages for the Buyer’s failure to accept, such amount calculated using the following formula:
Amount on which interest accrues = ANA x CP
Where:
ANA means Allowances not accepted, the total number of Allowances the Buyer failed to accept; and
CP means the aggregate Contract Price that the Buyer would have been required to pay to the Seller for all Allowances not accepted by it.

Comparison

See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs

Resources and Navigation

Index: Click to expand:

Emissions trading documentation
ISDA: EU AnatomyEU Wikitext EU Nutshell (premium) • UK AnatomyUK Wikitext (to be merged into EU Anatomy)
IETA: IETA Master AgreementIETA WikitextIETA Nutshell (premium)
EFET: EFET Allowances AppendixEFET Allowances WikitextEFET Nutshell (premium)

Overview

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The same concept is covered, in a roundabout way, as follows in the different versions of the emissions trading documents:
ISDA: Delivering Party’s Replacement Cost
EFET: Seller’s Cover Costs
IETA: Delivering Party’s Replacement Cost

See also “Receiving Party’s Replacement Costs” (ISDA and IETA) or Buyer’s Cover Costs (EFET) for the converse position.

Summary

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Template:M summ EFET Allowance Annex 8.2(b)

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  • The JC’s famous Nutshell summary of this clause
Template:M premium EFET Allowance Annex 8.2(b)

See also

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Template:M sa EFET Allowance Annex 8.2(b)

References