In any event, the general agreement describes very early on the concept of the single agreement on the document (section 1.1), which means that all transactions depend on each other and that a failure of a transaction is considered a late payment for all transactions covered by the agreement. The agreements and the EFET library associated with the complementary documentation are currently the sectoral standards used throughout Europe for the trade in physical performance and gas. These standardized management contracts for the supply and receipt of electricity or natural gas offer a structure similar to that of master`s contracts for OVER-the-counter derivatives published by the International Swaps and Derivatives Association Inc. (ISDA). EFET has commissioned legal opinions on the applicability of general power and gas agreements for many European countries, which are available to EFET members. The applicability of the general terms of sale of EFET in each country may vary according to local laws and customs. A list of countries and the cost of obtaining such legal advice are available on the EFET website (www.efet.org). The EFET agreement is a compensation-master contract that can cover an unlimited number of trades defined as “individual contracts.” Each contract includes the economic conditions of each trade (for example. B start and end date, delivery plans, contract capacity and quantity, price and total cost). There are also country and trade-specific annexes, developed by EFET to complement the terms of the general agreements, including: Derivatives Documentation Limited thanks our guest blogger Ernst van den Broek, founder of Trading Lawyers (www.tradinglawyers.com), for transmitting this useful synthesis of EFET agreements.

Ernst has more than 15 years of experience in the financial sector and regularly negotiates and provides training on ISDA master contracts, CSA, GMRAs, GMSLAs and EFETs. EfET not only promotes regulatory measures to allow the free flow of electricity and gas in a balanced risk environment, but has also developed standard legislation for energy trade.