(f) Article VII: Shortfalls

(a) Generation Shortfall: If the Project generates fewer Credits than projected for any Contract Year, Supplier must either deliver equivalent replacement Credits, increase future deliveries, or refund the corresponding purchase price.

(b) Delivery Shortfall: If Supplier fails to deliver the agreed quantity for other reasons, Supplier must cure within [__] days by delivering additional or replacement Credits. Failure to cure constitutes an Event of Default.

OSCAR provides for various alternatives for the parties to consider.

Comments

Carbon removal projects are risky, and performance shortfalls do occur. This clause balances risk between the Parties. It defines remedies for under-performance, distinguishing between failure to generate (Project risk) and failure to deliver (logistical or contractual risk). The structured cure options are supposed to preserve flexibility while maintaining Buyer confidence.