Template:Nutshell EUA Annex (d)(vii): Difference between revisions

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{{euaprov|(d)(vii)}} '''{{euaprov|No Encumbrances}}'''<br>
{{euaprov|(d)(vii)}} '''{{euaprov|No Encumbrances}}''': {{euaprov|Delivering Party}} must deliver all {{euaprov|Allowances}} free of all [[encumbrance]]s and competing interests (the “'''{{euaprov|No Encumbrance Obligation}}'''”). If it does not:
for each delivery of {{euaprov|Allowances}}, {{euaprov|Delivering Party}} must deliver {{euaprov|Allowances}}, free and clear of all [[Lien|liens]], [[Security interest|security interests]], claims and [[Encumbrance|encumbrances]] or any interest in or to them by any person (the “'''{{euaprov|No Encumbrance Obligation}}'''”).  
Where a party is in breach of the {{euaprov|No Encumbrance Obligation}}:
:(1) This {{isdaprov|Agreement}} and all {{euaprov|Transactions}} will continue unaffected.  
:(1) This {{isdaprov|Agreement}} and all {{euaprov|Transactions}} will continue unaffected.  
:(2) [[Without prejudice]] to any defences available to {{euaprov|Delivering Party}}, following written notice of that breach from {{euaprov|Receiving Party}} (however long after the {{euaprov|Delivery Date}}) and subject to Part {{euaprov|(d)(vii)}}(4), {{euaprov|Receiving Party}} must:
:(2) {{euaprov|Receiving Party}} must promptly given written notice of the {{euaprov|Encumbrance Loss Amount}} to {{euaprov|Delivering Party}} with reasonable calculation details.  
::(A) as soon as practicable, determine the {{euaprov|Encumbrance Loss Amount}} arising from the breach ; and
:(3) By close on the third {{euaprov|Business Day}} of an invoice following the notice, {{euaprov|Delivering Party}} must pay {{euaprov|Receiving Party}} the {{euaprov|Encumbrance Loss Amount}}, with interest at the {{euaprov|Default Rate}}. Once paid, the parties will have no further obligations under that {{isdaprov|Transaction}}, and these are its exclusive remedies for breach of the {{euaprov|No Encumbrance Obligation}}.
::(B) notify {{euaprov|Delivering Party}} of the {{euaprov|Encumbrance Loss Amount}} due, with calculation details.
:(4) Where transfering an {{euaprov|Affected Allowance}} breaches the {{euaprov|No Encumbrances Obligation}}, {{euaprov|Delivering Party}} will only be liable for the {{euaprov|Encumbrance Loss Amount}} if, when it acquired the {{euaprov|Affected Allowance}}, it was not acting [[in good faith]]; or:  
::In doing so, {{euaprov|Receiving Party}} need not enter into replacement transactions.  
::(A) {{euaprov|Receiving Party}}, has used its best good faith effos to defend a claim from the {{euaprov|Original Affected Party}}, but was unsuccessful; or  
:(3) By no later than the third {{euaprov|Business Day}} after receiving a valid invoice for such {{euaprov|Encumbrance Loss Amount}} (or the notice, if later), {{euaprov|Delivering Party}} must pay {{euaprov|Receiving Party}} the {{euaprov|Encumbrance Loss Amount}}, which will bear interest at the {{euaprov|Default Rate}}. Once paid, the parties will have no further obligations under that {{isdaprov|Transaction}}. {{euaprov|Receiving Party}} acknowledges that these are its exclusive remedies for breach of the {{euaprov|No Encumbrance Obligation}}.
::(B) {{euaprov|Receiving Party}}, having acted in good faith when buying such {{euaprov|Affected Allowance}} but still suffered a claim (from someone other than the {{euaprov|Original Affected Party}}) for that {{euaprov|Affected Allowance}}, has used all reasonable endeavours to mitigate the {{euaprov|Encumbrance Loss Amount}}. <br>
:(4) Where transfering an {{euaprov|Affected Allowance}} breaches the {{euaprov|No Encumbrances Obligation}}, {{euaprov|Delivering Party}} will be liable for the {{euaprov|Encumbrance Loss Amount}} if, when it acquired the {{euaprov|Affected Allowance}}, it was not acting [[in good faith]]; otherwise, it will only be liable under the {{euaprov|Transaction}} if:  
::(A) {{euaprov|Receiving Party}}, being subject to a claim from the {{euaprov|Original Affected Party}}, has used its best endeavours in good faith to defend such a claim, but was unsuccessful; or  
::(B) {{euaprov|Receiving Party}}, having acted in good faith when buying such {{euaprov|Affected Allowance}} but still suffering a third party claim ((from someone other than the {{euaprov|Original Affected Party}}) for that {{euaprov|Affected Allowance}}, has used all reasonable endeavours to mitigate the {{euaprov|Encumbrance Loss Amount}}. <br>

Latest revision as of 11:52, 14 July 2022

(d)(vii) No Encumbrances: Delivering Party must deliver all Allowances free of all encumbrances and competing interests (the “No Encumbrance Obligation”). If it does not:

(1) This Agreement and all Transactions will continue unaffected.
(2) Receiving Party must promptly given written notice of the Encumbrance Loss Amount to Delivering Party with reasonable calculation details.
(3) By close on the third Business Day of an invoice following the notice, Delivering Party must pay Receiving Party the Encumbrance Loss Amount, with interest at the Default Rate. Once paid, the parties will have no further obligations under that Transaction, and these are its exclusive remedies for breach of the No Encumbrance Obligation.
(4) Where transfering an Affected Allowance breaches the No Encumbrances Obligation, Delivering Party will only be liable for the Encumbrance Loss Amount if, when it acquired the Affected Allowance, it was not acting in good faith; or:
(A) Receiving Party, has used its best good faith effos to defend a claim from the Original Affected Party, but was unsuccessful; or
(B) Receiving Party, having acted in good faith when buying such Affected Allowance but still suffered a claim (from someone other than the Original Affected Party) for that Affected Allowance, has used all reasonable endeavours to mitigate the Encumbrance Loss Amount.
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