Take Or Pay Agreement Is Entered Between

Therefore, the initial approach and the purpose of the clause is to balance the interests of both parties, i.e. the supplier and the seller (seller or consumer). The take-or-pay clause is activated if the buyer does not purchase the entire quantity of natural gas ordered. In many cases, the latter is required to pay the purchase price of a minimum quantity of predetermined natural gas (upgrade quantity), even if he did not purchase this quantity during the year concerned. As a rule, the buyer can take care of the amount of makeup in future contract years, either by paying a newly fixed special price or without the obligation of second payment. When an over-the-counter or payment payment is payable, it is often significant and the buyer will dispute it, usually arguing that it is an unenforceable penalty or that the underlying cause was a force majeure event and that, therefore, the amount of TOP is reduced (or both). The fact that an over-the-counter or paid payment is not due due due to a breach or delay (rather, it results from the buyer`s prevailing decision not to take the TOP quantity) is one of the main reasons why most UK and US courts have held that take or pay clauses are enforceable when a buyer challenges the clause as an unenforceable penalty. In these cases, the courts usually quickly indicate that no sanction can be imposed where there is no offence. Some courts consider that a take or payment clause is similar to a capacity or reserve payment, in which the payment is considered to be consideration for the seller`s obligation to be ready for the performance by making available to the buyer the agreed quantity of goods instead of being a payment for the delivery of the real goods. Other courts often characterize an over-the-counter or payment payment as a down payment for the goods, especially when there is a make-up right, but we find that there is usually no transfer of ownership of the goods until it is delivered later. One of the fundamental principles of Directive 2009/73/EC[8] is in particular the possibility of allowing third parties access to the natural gas transmission system, i.e. any supplier may have access to it.

In this context, derogations from this rule may be requested where another natural gas company that already has access to the network demonstrates that it is experiencing economic and financial difficulties as a result of the take-up or payment clause it has received[9]. . . .

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