If the reason for termination is default by the Contractor (paragraph 24), then the Board pays compensation equal to or equivalent to the "transfer value" of the Contract. That is, the amount which a third party will pay for the remaining benefit of the Contract. This is established in one of two ways:-
1.2.1 if certain conditions apply, the whole contract will be retendered. The Contract should then be taken over by another operator and the "proceeds of the sale" of the Contract (after certain adjustments are made) are paid to the Contractor.
1.2.2 Where retendering is not possible (for example, where there are insufficient bidders), or the Board elects not to permit this, the "Fair Value" of the remaining Contract will instead be assessed on a hypothetical basis and this fair value will be the compensation payable to the Contractor. Hence, the Board will not receive a windfall through "selling" the rest of the Contract to a successor Contractor, but will not have to pay any other compensation.