to be occasioned by the breach. Available from: p?vref1 Accessed Reference Copied to Clipboard. There is a presumption (but no more) that a clause is a penalty when a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others. Situations however arise where a purchaser is in breach of his TOP obligation and wants to avoid liability by alluding to payment made pursuant to a TOP obligation as a separate obligation constituting penalty. This clause is often inserted in the TOP provision to protect the buyer so that he can recoup any minimum payments paid to the producer: this pre-supposes the buyer takes in excess of the minimum quantity and sets off this excess against any prior minimum. Referred to in determining whether a take or pay clause would offend the rule against penalties. Monkland Iron and Coal 37 have held that the fact that the Parties have described the clause as a liquidated damages clause or a penalty clause is a relevant fact but not conclusive as the court will consider as a question whether it. This paper will also review the competing views on the legal character of TOP to aid our understanding of the differences between liquidated damages and penalty. Maximum quantity The TOP clause is a function of a maximum quantity of gas available- Maximum Daily Quantity (MDQ) established in the sale contract (generally the TOP quantity is set as a percentage of the MDQ). It does not matter if the demand is higher; he has to contend with the maximum quantity available. Ln practice however, the application of make-up clauses have some limitations which impede the equality of the quantity paid to the quantity taken.
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Description Visibility Others can see my Clipboard. The English High Court has held in General Trading Company (Holdings) Ltd. Thomas Walde 18 has advised that a long term commitment to take the output is describe your favorite sport essay required to encourage gas development and that a Government guaranteed long term sales contract is similar to a take or pay contract and is desired for a fledging and undeveloped. Thus, the maximum quantity clause may prevent complete recapture or payments if the buyer needs more gas than the maximum allows. As previously discussed under relevance of the penalty rule to take-or-pay provisions, two usual features of the Top obligation were missing from this case and their unavailability could have impacted on the mind of Burton, J in concluding the way he did. A gas producer will only undertake a significant upfront capital investment for gas where there is an available market backed up with guarantees to assure minimum cash flow to the gas producer, provide collateral security to lenders to support the investments. Online Course - LinkedIn Learning, my Packet, wendy Scruggs. The penalty clause rule applies only to sums of money which are payable on breach of a contract as was the case in Euro London Appointments Ltd. Thiele Heino 39 argues that it does not seem justified to limit the period of the make up rights at all, since the protection of a minimum income which is always cited by producers as the reason for take or pay provisions is actually achieved. Peter Roberts 2 has argued that the customary allocation of risk in a GSA is that the seller is responsible for the economic and operational risks involved with developing and completing the gas project to ensure gas gets to the purchaser, whilst the purchaser.
This question counts for one-third of the essay section score) In William Faulkner s A Rose for Emily, Emily Grierson passes away as a result of attempting. Submitted by a law student. This is not an example of the work written by our professional essay writers. EC English Court (.
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