Trusty Resources Ltd is a producer of natural gas. Trusty entered into a contract with Power Marketing

Question:

Trusty Resources Ltd is a producer of natural gas. Trusty entered into a contract with Power Marketing Inc to find a purchaser of Trusty’s gas that would commit to a long-term purchase agreement. Trusty entered into a 15-year supply agreement with Clean Energy Inc, a purchaser found by Power. The agreement provided that Trusty would pay Power a fee for each unit of gas purchased under the contract. For five years, Clean Energy purchased gas under the contract and Trusty paid Power the agreed fee. After five years, Clean Energy wanted out of the agreement because the price that it had to pay under the agreement was too high. Trusty agreed to terminate the contract at the end of the sixth year. Halfway through the sixth year, Clean Energy and Trusty agreed that Clean Energy would no longer be obliged to purchase gas under the contract in return for a payment to Trusty of $100 000. Does Trusty have any liability to Power for the fees that would have been paid if the contract had continued for the full 15-year term? What about if the contract had continued until the end of the sixth year?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Managing the Law The Legal Aspects of Doing Business

ISBN: 978-0132164429

4th edition

Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer

Question Posted: