Session 3 GSA MSPA GTA The Contracting Process.pptx

this session discuss about MoU and its variations, lock-in lock-out MoU, GSA and or MSPA Concerns, GTA Concerns, English Law, New York Law and Civil Continental Law

1. GSA-MSPA – GTA The Contracting Process [For Non Engineer] Sampe L. Purba Sampe Purba - GSA MSPA GTA The Contracting Process 1

2. Defined Terms Normally put in definition and capitalized in the beginning of Contract Purposes: Clarity Consistency Scope Efficiency Legal effect 2 Sampe Purba - GSA MSPA GTA The Contracting Process

3. Memorandum of Understanding Formal agreements between two or more Parties Outlining the terms and details of mutual understanding or agreement Various in terms of legal enforceability and degree of commitment 3 Sampe Purba - GSA MSPA GTA The Contracting Process

4. Variations of MoU Indicative [non-binding MOU] Intent, flexibility, Non-enforceability 2. Binding MoU Legal obligation, specificity, commitment 3. Hybrid MoU Mixed terms, intentional ambiguity, Clarity required 4. Framework or Umbrella MoU General agreement, Future actions, Non-binding nature 4 Sampe Purba - GSA MSPA GTA The Contracting Process

5. Lock-in vs Lock-out MoU Lock in MOU both parties committed to the negotiation or deal-making process May involve mutual exclusivity or a commitment to proceed with negotiation Ensures both parties remain fully committed to pursuing the deal Lock-out MOU Lock-out or preventing third party to discuss on the same subject matter Exclusivity for one party, preventing them from engaging with third parties ensures one party is the sole negotiator, excluding others during the negotiation process 5 Commitment Focus, Exclusivity, Use Cases Sampe Purba - GSA MSPA GTA The Contracting Process

6. GSA and/ or MSPA Concerns Seller Frequent payment by buyer Manageable deliverability Limited liability for failure Buyer long term and Short term deliverability Meaningful liability for failure Flexibility 6 Sampe Purba - GSA MSPA GTA The Contracting Process

7. GTA Concerns Shipper Capacity and Flexibility Meaningful Liability for failure Equality of Treatment Transporter Firm payment obligations for the shipper Manageable deliverability Limited Liability for failure 7 Sampe Purba - GSA MSPA GTA The Contracting Process

8. English Law vs New York/ US Law English Law Literal and Formalistic approach Strict rules for FM, penalties and contract performance Favoured for its predictability Often chosen in international agreements New York/ US Law Greater flexibility in contract interpretation Considers the commercial context and allows broader remedies Preferred for its adaptability Chosen in agreements where market conditions may require more dynamic interpretation 8 Sampe Purba - GSA MSPA GTA The Contracting Process

9. Continental Law (civil law Systems) 9 Codified Approach : Relies mainly on written laws and codes, not previous court decisions. Detailed Regulation : Contracts have more specific rules and guidelines. Good Faith : Focuses on honesty and fairness in negotiations and carrying out the contract. Rigidity vs. Fairness : Contracts are interpreted strictly but aim for fair outcomes. Force Majeure : Clearer rules on what counts as force majeure, with more situations covered. Hardship Clauses : More likely to allow contract changes if conditions become very difficult. Judicial Intervention : Courts can step in to adjust or interpret contract terms to make things fairer. Sampe Purba - GSA MSPA GTA The Contracting Process

10. References Peter Roberts https://www.amazon.com/Gas-LNG-Sales-Transportation-Agreements/dp/041411129X Routledge Handbook of Corporate Law, Roman Tomasic 2017 Sampe Purba – https://www.slideshare.net/sampepurba/presentations 10 Sampe Purba - GSA MSPA GTA The Contracting Process

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