Question
4. A counterparty to a major contract wishes to keep the contract price low but also reveals that its lender is requiring a right to
4. A counterparty to a major contract wishes to keep the contract price low but also reveals that its lender is requiring a right to unilaterally assignrights and responsibilities under the contract under certain loan repayment conditions. This worries you. Your best approach would be:
- A.
Use your concession to the assignment provision as leverage to lower other risks. The price term is only one "cost" of the contract, and risk can be lowered through other provisions.
- B.
Accept the terms. There is nothing you can do about it because lenders often require such an assignment term.
- C.
Push back on the price term. The only way to compensate for the higher risk that comes with unilateral assignment is with a more favorable contract price term.
- D.
Leave it to the lawyers. They'll handle it, and your attempts to get involved will only complicate the process.
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