Subsequent illegality Clause Samples
The 'Subsequent illegality' clause defines what happens if a contract or any of its obligations become illegal after the agreement has been made. Typically, this clause allows for the suspension or termination of the affected obligations if a change in law or regulation makes performance unlawful. For example, if a new law prohibits the sale of a product that is the subject of the contract, the parties are no longer required to fulfill that part of the agreement. The core function of this clause is to protect the parties from being forced to perform actions that have become illegal, thereby allocating risk and ensuring the contract remains compliant with current laws.
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Subsequent illegality. Where the fulfillment of any of the obligations arising from this Agreement involves for the Financing Entity the infringement of any statutory provision or regulation or regulatory measure ordered or binding criterion for interpretation which is issued by a competent authority or official body, the Financing Entity, after informing PEISA of the circumstances which cause the infringement or illegality, may declare all its obligations to be cancelled within a maximum period of thirty (30) Business Days from the date of notification to PEISA or within the maximum period allowed by the law in relation to innovation or change if the latter period is shorter. The Financing Entity shall adopt all the measures which are reasonable in order to avoid or mitigate the effects of the circumstances envisaged in this Clause and shall consult PEISA in good faith in order to find the means for the purpose expressed above, including that of transferring its share in this Agreement, with the consent of PEISA, to another or other credit institutions not affected by the circumstances in question. If it is not possible to find an alternative measure satisfactory to the Financing Entity, PEISA will be obliged to reimburse to the Financing Entity the Credit Facility and at the same time to pay the appropriate interest calculated up to the date on which the payment actually occurs, as well as the expenses and all other sums which, in accordance with this Agreement, it must pay to the Financing Entity.