During the term of the EFET agreement, the financial situation of the parties will fluctuate. In the event that one party`s financial situation deteriorates significantly, which is also called a significant adverse change1, the other party should be able to act quickly and require performance assurance.2 This insurance usually takes the form of additional credit support. Article 9 of the EFET Framework Agreement grants a non-defaulting party the right to immediately cease new supplies of electricity and to be released from its subsequent delivery obligations until it has received full payment of the amounts due or the collateral guarantee for them. Payments. The EFET Framework Agreement is available: www.efet.org/Cms_Data/Contents/EFET/Media/Documents/Public%20-%20Contracts/EFET%20General%20Agreement%20Power%20-%202.1(a)%20F%20September%202007%20(Version%203).pdf (accessed 8 February 2013) §15 of the EFET Framework Agreement deals with the method for calculating variable prices and also regulates fallback procedures in the event of market disturbances. The EFET Framework Agreement for Electricity Trade. It was drafted by EFET and is a framework agreement that includes terms and conditions on delivery terms, payment terms, settlement risks, default risks, clearing remuneration and duration. It applies to each of the underlying transactions. The agreements and the associated EFET supplementary documentation library are currently the industry standards used throughout Europe for the physical trade in electricity and gas. In addition, Article 12(4) of the EFET Framework Agreement clearly states that nothing excludes liability for: Usually, buyers and sellers using the EFET contract develop their own `in-house` view of the terms contained in their election document, depending on their market position. One of the most important issues to consider when developing such a position and negotiating with counterparties is the credit risk and credit support that the parties are willing to accept or require. .
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