The Ministry of Defence has announced it will sign a contract for Astute boat seven.
According to the Ministry of Defence; the United Kingdom has finally decided to order a seventh boat, and the contract with BAE will be formalized this year.
Negotiations are ongoing and the contingent liabilities will come into force on signature of the contract.
The Departmental Minute describes the Contingent Liability that the MOD will hold as a result of placing the Astute Boat 7 ‘Whole Boat’ Contract, which will provide for the production and testing of the Vessel. The maximum contingent liability against the MOD is unquantifiable and will remain until the Out of Service Date of the submarine.
Within the Boat 7 contract, BAE Systems Marine Ltd limit their exposure to Product Liability to £1 billion per incident and £300 million in any 12-month period. This limits the contractor’s exposure for claims by the MOD for losses associated with the product being defective or deficient, and creates an exposure for MOD to third party claims against the contractor for losses associated with the product being defective or deficient. It is the view of the Department that the likelihood of any claim is remote.
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