Diversion and Depletion Clause Samples

The Diversion and Depletion clause is designed to address situations where resources, such as water or energy, are redirected or reduced from their intended use. In practice, this clause typically outlines the rights and responsibilities of parties if a resource is diverted to another location or if its availability is diminished due to external factors, such as government action or third-party interference. Its core function is to allocate risk and clarify remedies or adjustments in obligations when resource availability is impacted, thereby preventing disputes and ensuring both parties understand how such events will be managed.