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LSDefine
Simple English definitions for legal terms
deregulation clause
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A quick definition of deregulation clause:
A deregulation clause is a part of a contract for buying and selling natural gas. It explains how the price of gas will be decided and what both the buyer and seller must do if the government stops regulating the price of gas. This clause is important because it helps both parties understand what will happen if the rules change.
A more thorough explanation:
A deregulation clause is a provision in a gas contract that outlines how the price of gas will be calculated and what the obligations of the buyer and seller will be if regulated natural gas becomes deregulated.
For example, a gas contract may include a deregulation clause that states that if the government deregulates natural gas prices, the buyer and seller will negotiate a new price based on market conditions. This clause protects both parties from unexpected changes in the market and ensures that they are prepared to adapt to any changes in regulations.
Another example of a deregulation clause could be in a contract between a utility company and a natural gas supplier. The clause may specify that if natural gas prices are deregulated, the supplier will be responsible for any additional costs associated with transporting the gas to the utility company's facilities.
Overall, a deregulation clause is an important component of gas contracts that helps to ensure that both parties are prepared for any changes in regulations that may impact the price or delivery of natural gas.