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IETA Emissions Trading Master Agreement
A Jolly Contrarian owner’s manual™
Loss in a Nutshell™
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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.
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Loss in all its glory
“ Loss” means:
- (a) for the purposes of Clause 13.2(c) (Two-way Loss Termination Payment), an amount that each Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of the FM Affected Transaction(s) or any uncompleted portions of them, including any EEP Amount (if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of such Party whether or not greater than market costs) or, without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss does not include legal fees or out-of-pocket expenses. Each Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties; or
- (b) for the purposes of Clause 14.6 (Termination Payments), an amount that the Non-Defaulting Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of all Transactions or any uncompleted portions of them, including any EEP Amount, if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of the Non-Defaulting Party whether or not greater than market costs) or, at the election of the Non-Defaulting Party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment required to have been made which has not been made or non-compliance with Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) (whether or not as a result of the suspension of the obligation to pay or comply with those sub-clauses under Clauses 14.3 (Suspension following Event of Default) or 14.5 (Early Termination Date)) on or before the Early Termination Date. Loss does not include the Non-Defaulting Party’s legal fees or out-of-pocket expenses. The Non-Defaulting Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties; or
- (c) for the purposes of Clause 14.7 (Illegality):
- (i) if there is only one Illegality Affected Party, as per the definition for the purposes of Clause 14.6 (Termination Payments) as set forth above; or
- (ii) if both Parties are Illegality Affected Parties, an amount that each Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of the Illegality Affected Transaction(s) or any uncompleted portions of them, including any EEP Amount (if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of such Party whether or not greater than market costs) or, without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss does not include legal fees or out-of-pocket expenses. Each Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties.
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