Seller’s Cover Costs - EFET Allowance Provision

2007 EFET General Agreement Version 2.1(a) (Power) A Jolly Contrarian owner’s manual™ 8.2(b) in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here. 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. edit Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs Resources and Navigation Index: Click ᐅ to expand: EFET Allowance Annex - Premium Emissions Emissions trading documentation ISDA: EU Anatomy • EU Wikitext • EU Nutshell (premium) • UK Anatomy • UK Wikitext (to be merged into EU Anatomy) IETA: IETA Master Agreement • IETA Wikitext • IETA Nutshell (premium) EFET: EFET Allowances Appendix • EFET Allowances Wikitext • EFET Nutshell (premium) Premium version of this page

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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• The JC’s famous Nutshell™ summary of this clause

Template:M premium EFET Allowance Annex 8.2(b)

See also

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