Reduction or suspension Clause Samples
The 'Reduction or suspension' clause allows one party to temporarily decrease or halt its obligations under a contract, typically in response to specific events or circumstances. For example, if a supplier is unable to deliver goods due to a force majeure event, this clause may permit them to reduce or suspend deliveries without breaching the contract. Its core practical function is to provide flexibility and risk management for parties when unforeseen events make full performance temporarily impossible or impractical.
Reduction or suspension. The Contracting Officer may reduce or suspend progress payments, increase the rate of liquidation, or take a combination of these actions, after finding on substantial evidence any of the following conditions:
(1) The Contractor failed to comply with any material requirement of this contract (which includes paragraphs (f) and (g) of this clause).
(2) Performance of this contract is endangered by the Contractor's --
(i) Failure to make progress or
(ii) Unsatisfactory financial condition.
(3) Inventory allocated to this contract substantially exceeds reasonable requirements.
(4) The Contractor is delinquent in payment of the costs of performing this contract in the ordinary course of business.
(5) The fair value of the undelivered work is less than the amount of unliquidated progress payments for that work.
(6) The Contractor is realizing less profit than that reflected in the establishment of any alternate liquidation rate in paragraph (b) of this clause, and that rate is less than the progress payment rate stated in subparagraph (a)(1) of this clause.
Reduction or suspension. The Contracting Officer may reduce or suspend progress payments, increase the rate of liquidation, or take a combination of these actions, after finding on substantial evidence any of the following conditions:
(1) The Contractor failed to comply with any material requirement of this contract (which includes paragraphs (f) and
Reduction or suspension. 6.1 In the case of revolving credit facility and loans payable in installments, if the credit transactions are deemed to have been materially affected in an adverse manner by rapid change in national economy or financial market conditions or substantial deterioration of the credit standing of the Borrower, the Bank may, by giving notice to the Borrower, reduce the agreed credit (limit) amount as set forth in Article 1 or temporarily suspend issuance of credit even during the credit period. In such case, the Borrower shall immediately repay any excess amount arising from the reduced credit limit.
6.1.1 The term, “rapid change in national economy or financial market conditions,” shall mean any of the following events:
(i) the credit rating of Korea or the Bank is downgraded by two or more levels and the Bank’s financing is expected to face a material risk caused by factors such as a drastic increase in financing costs represented by interest rates;
(ii) Korea seeks emergency funds from an international organization due to causes such as foreign currency crisis;
(iii) the Bank seeks a liquidity adjustment loan from the Bank of Korea due to causes such as insufficient reserves; or
(iv) any other radical change has occurred to the national economy or financial market conditions.
6.1.2 The term, “substantial degradation of the credit standing of the Borrower,” shall mean any of the following events:
(i) the credit rating of the Borrower is markedly downgraded (by two or more levels, etc.)
(ii) it is difficult to conduct credit transactions in a normal manner as a result of change in major shareholder(s) or business management;
(iii) the external auditor provides a negative opinion or rejects to provide its opinion;
(iv) trustful broadcasting media, including major daily newspapers, TV, etc., make a report, which may result in substantial degradation of the credit standing of the Borrower, and such report is confirmed;
(v) an investigation, which may greatly affect the credit standing of the Borrower, or a litigation, which may significantly affect the business of the Borrower, is commenced; and
(vi) the credit is accelerated pursuant to Article 7 of the General Terms and Conditions (for corporation).
(vii) any events conforming to the above cases have occurred.
6.2 If any of the events set forth in Article 6.1 above is cured and credit transactions may be conducted in a normal manner, the Bank shall immediately cancel the reduction or suspension, as the case may...
Reduction or suspension. 1. In the case of revolving credit facility and loans extended in installments, if the credit transactions are deemed to have been materially affected in an adverse in an adverse manner by repaid change in national economy or financial market conditions or substantial deterioration of the credit standing of the Borrower, the Bank may, by giving notice to the Borrower, reduce the agreed credit(limit)amount as set forth in Article 1 or temporarily suspend extension of credit even during the credit period . In such case, the Borrower shall immediately repay any amount in excess of the reduced credit limit.
2. If any of the event set forth in paragraph 1 above is cured and credit transactions may be conducted in a normal manner, the Bank shall immediately cancel the reduction of credit (limit)amount or suspension of credit extension(as the case may be)