No Consequential Loss - Emissions Annex Provision

EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions A Jolly Contrarian owner’s manual™ (d)(ix) 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. (d)(ix) in all its glory (d)(ix) No Consequential Loss Except to the extent included in any amount payable under Section 6(e) of the Agreement, any payment in respect of Receiving Party’s Replacement Cost or Delivering Party’s Replacement Cost, or any payment in respect of Encumbrance Loss Amount, neither party is liable to the other, whether in contract, tort (including negligence and breach of duty) or otherwise, for any business interruption or loss of use, profits, contracts, production or revenue or for any consequential or indirect loss or damage of any kind however arising. 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: ISDA Emissions TOC EUA Annex - Premium Emissions Pro tip: for tons of information about EU ETS and EU financial services regulation see Michał Głowacki’s magnificent emissions-euets.com website. 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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What ought to be an after thought winds up being a complete mangle. Really, you shouldn’t be suddenly mentioning something as fundamental as consequential losses in an specific product annex to a definitions booklet — and if you do have to mention it, ideally you wouldn’t make such an unholy mess of it — but this is the world we live in.

Summary

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So firstly this sets out to exclude consequential losses then opens the door to all the places it is most conceivable someone might contrive to claim them: as a close out, during a Failure to Deliver pre-close-out mechanism, and as a result of a misrepresentation about title to the Allowances you have delivered.

All of these are good places not to exclude consequential loss, so we tend to agree they should be excluded, but it feels to us like the consequential loss provision should therefore just be omitted.

Let us rehearse: ordinarily, consequential losses and loses of profit are too speculative and too indeterminate to pass the remoteness test, and so would not be available as a remedy for breach of contract anyway.

But where they are determinate — for example, when one misses out on deposit interest one could expect to earn on a failed or delayed payment — these will, and more to the point should, be recoverable.

Meaning this clause does not really do anything.

Oh, and “loss” and “damages” are different things, for Pete’s sake. They are not synonyms.

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• The JC’s famous Nutshell™ summary of this clause
• Why losses and damages are different things — for those who have lost their LAWS 201: The Law of Contract notes.

See also

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• Consequential loss