Negative Pricing Clause Samples
The Negative Pricing clause defines how parties will handle situations where the price of a commodity or service falls below zero, resulting in a scenario where sellers may need to pay buyers to take delivery. In practice, this clause outlines the calculation methods, settlement procedures, and obligations of each party if negative pricing occurs, ensuring that contracts remain enforceable and clear even in volatile markets. Its core function is to allocate risk and provide certainty by preemptively addressing the rare but impactful event of negative market prices, thereby preventing disputes and confusion.
Negative Pricing. The Company’s proprietary and non-proprietary platforms do not support sub-zero prices. Therefore, the Company does not allow the trading of sub-zero (negative) prices. Where the prices of any financial instrument collapse in sub-zero (negative) prices, the Company is obliged to disable the trading for the specific instrument and as a result closure of the existing positions at zero price for the instrument affected will occur. For more information, please download our Risk Disclaimer Policy
Negative Pricing. 12.1 Upon a Negative Price Period, the Support Counterparty shall require the Seller not to generate in accordance with the Applicable Laws. If the Seller`s generation is partly or totally curtailed due to Negative Price Period(s) as per this clause for an aggregated amount of settlement periods higher than [■], the Seller is entitled to a compensation by the Support Counterparty for an amount equal to: [the product of: (i) Electricity Price and (ii) the Final Nominated Output for the curtailed volumes]. If compensation as per this clause applies, the Support Counterparty may require the Seller to comply with forecast accuracy requirements as per 7.17 mutandis mutandis.
12.2 Any Curtailment during a Negative Price Period will be included in excused hours for the purposes of the Availability Guarantee, and excused production for the purposes of the Performance Guarantee.]