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2007 EFET General Agreement
Version 2.1(a) (Power)
A Jolly Contrarian owner’s manual™
8.5 in a Nutshell™
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8.5 in all its glory
§ 8.5 Remedies for Failure to Transfer or Accept after Cessation of Suspension Event
- (a) Where the Buyer fails to accept Transfer from the Seller of the Contract Quantity in whole or in part on a Delayed Delivery Date and such failure is not excused by an event of Force Majeure, another Suspension Event or the Seller’s non-performance, the Seller’s Cover Costs shall consist of the sum of the following elements:
- (i) the Seller’s Cover Costs as provided in § 8.2(b) of this Allowances Appendix;
- (ii) an amount (the “Default Cost of Carry Amount”) calculated at the Default Cost of Carry Rate for the Default Cost of Carry Calculation Period multiplied by the product of the Contract Price and the number of Allowances not Transferred or accepted for the relevant Allowance Transaction, divided by three hundred and sixty (360). Such Default Cost of Carry Amount shall be identified in the relevant invoice; and
- (iii) interest on the Default Cost of Carry Amount accrued from (and including) the Delivery Business Day following the Default Cost of Carry Calculation Period, to (but excluding) the receipt by the Seller of damages for the Buyer’s failure to accept Transfer, calculated at the Interest Rate specified in § 13.5 (Default Interest) of the Agreement.
- (b) Where Seller fails to Transfer to the Buyer the Contract Quantity in whole or in part on a Delayed Delivery Date and such failure is not excused by an event of Force Majeure, another Suspension Event or the Buyer’s non-performance, Buyer’s Cover Costs shall consist of the aggregate of the following elements:
- (i) Buyer’s Cover Costs, as provided in either:
- (a) § 8.1(b)(i) of this Allowances Appendix; or,
- (b) where an EEP or EEP Equivalent has been made applicable to an Allowance Transaction and has arisen, § 8.1(b)(ii) of this Allowance Appendix;
- in either case, reduced by
- (ii) the Default Cost of Carry Amount;
provided, always, that in the event that the number resulting from application of the applicable formula set forth immediately above in either § 8.5(a) or § 8.5(b) results in a negative number, such number shall be deemed to be zero and no damages will be owed.
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Comparison
Resources and Navigation
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Overview
Just what happens if, without excuse, a Delivering Party fails to deliver, or a Receiving Party fails to accept delivery of, Allowances is a key part of any self-respecting emission allowances trading document. Though each Carbon Squad approaches it in its own charmingly idiosyncratic way, the good ninjas of ISDA, EFET and IETA broadly get to the same place. Broadly.
The provisions are these:
ISDA: Sections (d)(ii) (Failure to Deliver)
EFET: Clause 8.5 (Remedies for Failure to Transfer or Accept after Cessation of Suspension Event)
IETA: Clause 12 (Transfer or Acceptance Failure)
Summary
Template:M summ EFET Allowance Annex 8.5
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See also
Template:M sa EFET Allowance Annex 8.5
References