Exceptions to increased costs Clause Samples
The "Exceptions to increased costs" clause defines circumstances under which a party is not required to pay for additional costs that would otherwise be chargeable under the contract. Typically, this clause outlines specific situations—such as costs arising from the other party's actions, regulatory changes, or force majeure events—where increased expenses cannot be passed on. Its core function is to allocate financial risk fairly by clarifying when cost increases are not recoverable, thereby preventing disputes over unexpected charges.
Exceptions to increased costs. Clause 8.5 does not apply to the extent any additional cost or reduced return referred to in that clause is:
8.6.1 compensated for by a payment made under clause 8.12; or
8.6.2 compensated for by a payment made under clause 17.3; or
8.6.3 attributable to the wilful breach by the relevant Facility Beneficiary (or the holding company of that Facility Beneficiary) of any law or regulation; or
Exceptions to increased costs. Nothing in Subclause 16.1 (Increased costs) shall entitle any Finance Party to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, forgone, return or loss to the extent that the same:
(a) is taken into account in calculating the Mandatory Cost; or
(b) is already the subject of an additional payment under Subclauses 15.1 (Grossing-up for Taxes) or 15.2 (Tax Indemnity) (or would have been subject to an additional payment but for the application of Subclause 15.3 (Qualifying Lenders)); or
(c) has not been demanded within six months of the first day on which both (i) the Finance Party has the right to claim such compensation under Subclause 16.1 (Increased Costs) and (ii) the officers of such Finance Party involved in the administration of its participation in the Facilities are aware of the circumstances giving rise to the right to such compensation and that such circumstances give a right to claim such compensation under this Agreement; or
(d) is attributable to the breach by any such Finance Party or its holding company of any law or regulation, unless such law or regulation was introduced or changed or the interpretation or application of such law or regulation changed after the date of this Agreement.
Exceptions to increased costs. Nothing in Subclause 16.1 (Increased costs) shall entitle any Finance Party to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, forgone, return or loss to the extent that the same:
(a) is taken into account in calculating the Mandatory Cost; or
(b) is already the subject of an additional payment under Subclauses 15.1 (Grossing-up for Taxes) or 15.2 (Tax Indemnity) (or would have been subject to an additional payment but for the application of Subclause 15.3 (Qualifying Lenders)); or
(c) has not been demanded within six months of the first day on which both (i) the Finance Party has the right to claim such compensation under Subclause 16.1 (Increased Costs) and (ii) the officers of such Finance Party involved in the administration of its participation in the Facilities are aware of the circumstances giving rise to the right to such compensation and that such circumstances give a right to claim such compensation under this Agreement; or
(d) is attributable to the breach by any such Finance Party or its holding company of any law or regulation, unless such law or regulation was introduced or changed or the interpretation or application of such law or regulation changed after the date of this Agreement. A Finance Party shall at the request of the Parent take all reasonable steps to mitigate any circumstances which arise and which result in or would result in any amount being payable under Subclause 16.1 (Increased Costs), and the Obligors shall indemnify each Finance Party on demand for all costs and expenses reasonably incurred by that Finance Party as a result of any step taken pursuant to such request. A Finance Party need not take any steps if, in the opinion of that Finance Party, acting reasonably, to do so may be materially prejudicial to it.