Where the Academy Trust is entitled, in respect of an act or omission of the Contractor or a [Contractor Related Party] or a risk allocated to the Contractor under the Project Agreement, to claim compensation from the Authority under any agreement with it and the Authority subsequently makes a claim against the Contractor under the terms of the Project Agreement in respect of the same act or omission or risk, the Contractor waives any right to defend the Authority's claim on the ground that the Authority is only required to pay compensation to the Academy Trust under the agreement with it to the extent that the same is recoverable by the Authority from the Contractor under the Project Agreement.6
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6 It is preferable to include this clause in the Deed of Variation as a protection for the Academy Trust where the School Agreement contains back-to-back provisions under which the Authority must compensate the Academy Trust for some matter which the Contractor is responsible for under the Project Agreement and such back-to-back provisions are on terms that the Authority will only be liable to the Academy Trust to the extent the Authority makes recovery from the Contractor under the Project Agreement. The purpose of the clause is not to affect the risk profile of the Contractor (which should remain the same) but rather to guard against a technical "no loss" argument in response to a legitimate claim under the Project Agreement (the clause is motivated by the same concern which causes PFI contractors and their funders to include in the Project Agreement a clause such as clause 63.8 (Sub-Contractor Losses) of the BSF Project Agreement). The clause arises from the change in circumstance which sees the school becoming (on conversion) independent of the Authority, meaning that losses which pre-conversion would have been incurred by the Authority will post-conversion fall on the Academy Trust thus necessitating back-to-back provisions of the type referred to above (because the Academy Trust is not a party to the Project Agreement).