Defect Value Sample Clauses
The Defect Value clause defines how the financial impact of a defect in goods or services is determined and addressed within a contract. Typically, this clause outlines the method for calculating the reduction in value caused by a defect, such as referencing repair costs, replacement costs, or the difference between the contract price and the value of the defective item. By establishing a clear formula or process for quantifying losses due to defects, this clause helps allocate risk and provides a straightforward mechanism for resolving disputes over defective performance.
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Defect Value. In determining which portions of the Assets are impacted by Defective Interests, it is the intent of the parties to include, to the extent possible, only that portion of the affected Asset (whether a Well, unit or leasehold interest, as applicable) materially and adversely affected by the defect or basis for such property being treated as a Defective Interest. The Defect Value shall be determined by the parties in good faith taking into account all relevant factors, including, but not limited to, the following:
(1) The Allocated Value of the affected Asset;
(2) If the Title Defect represents only a possibility of title failure, the probability that such failure will occur;
(3) The legal effect of the Title Defect; and
(4) If the Title Defect is a lien or encumbrance on the property, other than a Permitted Encumbrance, the cost of removing such lien or encumbrance; provided however, there shall be no Title Deductible for a Title Defect which is a lien. Provided, however:
(i) If the Title Defect is that the NRI of Seller in a Well is less than the NRI set forth for such Well on Exhibit B, then the Defect Value shall be deemed to equal to the Allocated Value for such Well multiplied by the difference of (a) 1 minus (b) a fraction, the numerator of which is the actual NRI of such Well and the denominator of which is the NRI for such Well as set forth on Exhibit B; or
(ii) If the Title Defect causes the actual net mineral acres covered by any Undeveloped Tract to be less than the net mineral acres set forth on Exhibit B for such Undeveloped Tract, then the Defect Value shall be deemed to be equal to the Allocated Value for such Undeveloped Tract multiplied by the difference of (a) 1 minus (b) a fraction, the numerator of which is the actual net mineral acres covered by such Undeveloped Tract and the denominator of which is the net mineral acres for such Undeveloped Tract as set forth on Exhibit B. Only that portion of an Entry Item that is materially and adversely affected by a Title Defect shall be considered for purposes of determining the Defect Value. The Defect Value shall be only the amount of the reduction in the Allocated Value that exceeds the Title Deductible and shall not exceed the Allocated Value of the Entry Item after taking into consideration the Title Deductible.
Defect Value. “Defect Value” means the following:
Defect Value. “Defect Value” means with respect to a Lease the amount by which the value of the applicable Lease has been reduced by a Title Defect. The Defect Value shall be determined by the Parties in good faith taking into account all relevant factors, including without limitation, the following:
Defect Value. If a claim of Title Defect is made pursuant to Section 3.2 (iii) for a matter not covered by Sections 3.2 (i) or (ii), the value of the defect ("Defect Value") for a defect that is a liquidated or certain amount shall be such liquidated or certain amount, and as to unliquidated or uncertain amounts it shall be an amount necessary to compensate Buyer for the adverse economic effect of such Title Defect on the value of the property(ies) affected, taking into consideration all relevant factors, including the practical and legal effect of the Title Defect. In no instance shall a Defect Value be an amount in excess of the Allocated Value of an affected property.
Defect Value. “Title Defect Value” means the amount by which the Allocated Value of an Asset has been reduced by a Title Defect, and shall be determined by Buyer and the Seller Representative in good faith taking into account all relevant factors, including without limitation, the following: (i) if the Title Defect is a lien or encumbrance on the Asset, the Title Defect Value shall be the cost of removing such lien or encumbrance, (ii) if the Title Defect is an actual reduction in NRI or Mineral Interest, the Title Defect Value shall be the Allocated Value for the particular Asset, proportionately reduced by the ratio of the actual NRI/Mineral Interest to the represented NRI/Mineral Interest and (iii) if the Title Defect does not fall into subsection (i) or (ii), then the factors to be considered shall include (a) the Allocated Value of the affected Asset, (b) the current status of the Asset affected by the Title Defect (i.e., proved developed producing, etc.) and if such interest is producing, the present value of the future cash flow, net of capital expenditures, expected to be generated therefrom, (c) if the Title Defect represents only a possibility of title failure, the probability that such failure will occur, and (d) the legal effect of the Title Defect.
Defect Value. In determining which portions of the properties are Defective Interests, it is the intent of the parties to include, to the extent possible, only that portion of the affected Asset (whether a Well, unit or leasehold interest, as applicable) materially and adversely affected by the defect or basis for such property being treated as a Defective Interest. The Defect Value shall not exceed the Allocated Value of the Asset and shall be determined by the parties in good faith taking into account the Title Deductible per Title Defect and all relevant factors, including, but not limited to, the following:
(1) The Allocated Value of the affected property;
(2) The potential or actual reduction in the warranted NRI of the Defective Interest, or the potential or actual increase in the warranted WI to the extent such increase is not accompanied by a corresponding increase in NRI;
(3) If the Title Defect represents only a possibility of title failure, the probability that such failure will occur;
(4) The legal effect of the Title Defect; and
(5) If the Title Defect is a lien or encumbrance on the property, the cost of removing such lien or encumbrance; provided however, there shall be no Title Deductible for a Title Defect which is a lien.
Defect Value. For each Title Defect that is claimed, the allocated value of such defect shall be Six Hundred Dollars ($600.00) per net mineral acre multiplied by the number of net mineral acres of leasehold set forth in the attached Exhibits “A” and “C” to be conveyed hereunder attributable to such defect, and Four Hundred Dollars ($400.00) per net mineral acre multiplied by the number of net mineral acres of leasehold set forth in the attached Exhibit “B” to be conveyed hereunder attributable to such defect.
Defect Value. As used herein, the term "Defect Value" shall mean:
Defect Value. The amount by which the Allocated Value of a Defective Interest has been reduced by a Title Defect (the “Defect Value”) shall be determined in accordance with this Section 4.2(d). In determining which portion of a Property is a Defective Interest pursuant to this Section 4.2(d), it is the intent of the parties to include, to the extent possible, only that portion of the Property adversely affected by the defect as a Defective Interest. The Defect Value may not exceed the Allocated Value of the Property, and shall be determined by the parties in good faith taking into account all relevant factors, including, without limitation, the following:
(i) the Allocated Value of the affected Property;
(ii) in the case of ▇▇▇▇▇ or Well Locations, the potential for, or actual reduction in, the NRI of the Defective Interest, or the potential for, or actual increase in, the WI to the extent such increase is not accompanied by a corresponding increase in the NRI of the Defective Interest;
(iii) if the Title Defect represents only a possibility of title failure, the probability that such failure will occur;
(iv) the legal effect of the Title Defect; and
(v) if the Title Defect is a lien or encumbrance on the Property, the cost of removing such lien or encumbrance.