Common use of Termination Amount Clause in Contracts

Termination Amount. (a) The Customer acknowledges that the Termination Amount: (i) is intended to represent a genuine and reasonable assessment of the loss of future profit, increased average operating costs, proportionate share of ongoing fixed costs and decommissioning costs likely to be incurred by the Scheme Owner for the Distribution Network having regard to the quantities of water supplied and the persons supplied from the Distribution Network; and (ii) protects a legitimate commercial interest of the Scheme Owner for the occurrence of the circumstances in which the Termination Amount becomes payable. (b) The Scheme Owner reserves the right to undertake a formal assessment of the Termination Amount, at the cost of the Customer.