“Rely upon Information”

“Rely upon Information” in Energy Sector Contracts – Risk Allocation in Technical Deliveries and License Agreements

Introduction

The energy sector is characterized by complex projects with high technical and commercial risk. These projects often involve a combination of technology transfer, software integration, hardware deliveries, and local adaptation. In this context, it is crucial to understand who bears responsibility for the foundation on which design and services are based and what this responsibility entails.

A central, but often underestimated, contractual tool in this context is the concept of “Rely Upon Information” (RUI). It concerns information that one party provides – and which the other party should in principle be able to rely on without being responsible for errors, deficiencies, or omissions in them.

Relevance in the Energy Sector

In energy and cleantech projects (e.g., wind, solar, biogas, PtX, or offshore gas infrastructure), technologies are often used that are delivered by specialized OEMs or technology holders, who base design and production on input from the customer. This applies to, for example:

• Information about local grid conditions or load profiles
• Data on climatic conditions, soil conditions, or vibrations
• Information about existing facilities or SCADA architecture
• Limitations set by local authorities or energy grid operators

In many cases, such data comes from the customer or their advisors and forms the basis for system design, software parameters, or license scope. Here, it is crucial whether and how the supplier can rely on this information without assuming the risk for its accuracy.

What is “Rely upon Information”?

“Rely Upon Information” refers to specific information that a supplier or licensee can rely on without bearing the risk for its accuracy. As a starting point, this creates a clear basis for design decisions, pricing, and project planning. The purpose is to specify the risk allocation: If the data proves to be incorrect, it is not the supplier but the informing party (typically the customer or an authority) who bears the consequences.

RUI in Technology Deliveries and License Agreements

Example: Delivery of inverters for a solar power plant
The licensor states that there are maximum voltage fluctuations of 4 kV in the area. If the licensor has designated this grid data as RUI, and it subsequently turns out that the fluctuations actually reach 7 kV, the supplier cannot, as a starting point, be held responsible for malfunction, even if the product does not perform under the actual conditions.

Example: Technology license for a PtX plant
The licensee receives process simulations and dimensioning data from the licensor. If these are designated as RUI, and it turns out that the specified integration cannot be achieved in practice, the licensee may be entitled to adjustments or changed compensation.

Partners should be aware that in formulating a specific RUI clause, a number of choices and modifications can be made, such as the extent and size of liability, and possible liability limitations, the timing for when RUI documents must be delivered, and a wide range of other conditions. It can also be clarified how the parties deal with later changes to the RUI documentation, whether there are specific regulatory standards or principles that may be affected by RUI, or whether special procedures should apply for obtaining or updating RUI documents originating from other project participants.

Legal Implications and Recommendations

For Technology Suppliers and Licensors

• Insert an explicit RUI clause in the contract where specific documents or data types are identified as “Rely Upon Information”.
• Make the definition of RUI as broad and general as possible.
• Ensure that responsibility for the validity of RUI lies with the party that provides it.
• Introduce a contractual mechanism where changes in RUI give rise to price adjustments, extensions, or changes to services.

For Customers and Licensees

• Be aware that designating and providing RUI can create strict liability – even if the information comes from a third party.
• Make the definition of RUI as narrow and precise as possible.
• Consider limiting RUI to validated, controlled information, e.g., by explicitly marking documents with “For Information Only” or “For Reliance”.
• Avoid vague or general formulations – precision is crucial to avoid interpretation disputes.

RUI in Standards and Industry-Specific Practices

In contracts in the energy sector – e.g., those based on FIDIC Conditions, NEC3/NEC4, or standards for energy trading and infrastructure – there is an opening for the application of RUI principles, although the term is not always used explicitly.

For example, in the FIDIC Yellow Book (Design Build), it is recognized that the employer is in certain cases responsible for information in “Employer’s Requirements” – which can be RUI in practice.

In Joint Venture or EPC contracts for, e.g., offshore wind farms, it is common for specific inputs (such as GIS data, cable routes, soil conditions, environmental limit values) to be identified as “rely upon”, and that errors in these can trigger “relief events”.

Concluding Remarks

“Rely Upon Information” is not just a technical or linguistic refinement – it is an important tool for clarifying responsibility and creating predictability in highly specialized contractual relationships in the energy sector.

When used correctly:

• inappropriate risk assumptions are avoided,
• technical due diligence is facilitated, and
• disputes about errors in basic data are prevented.

The concept should therefore be actively included in contract negotiations – not as a standard formulation, but as a conscious element in the project’s risk management.

SAAF regularly advises on the use of RUI in technology and supply contracts. We have extensive practical experience in finding solutions that both secure the parties’ legal positions and at the same time make it possible for the parties to reach agreement.