Contractual discretions are common in commercial contracts. They allow one party to make a decision based on their review of the other party’s performance against specified criteria.
Lewin & Darwin’s clause provides a new incentivisation mechanism for contract parties. It contains various climate-linked contractual discretions which can be used in new and existing contracts. The clause also contains climate-linked criteria and definitions to develop existing contractual discretions.
By using these clauses, parties are incentivised to behave sustainably to satisfy the criteria of the new or developed discretion. This clause also helps to overcome contractual drafting limitations which prevent climate practices and standards from being defined.