Question

Recoupmeht of short working? Explain it's types.

Answer 1

Answer: Recoupment of Short-working: Usually, in a royalty agreement, a further provision is included about the recoupment of short-working, i.e., the lessor allows the lessee the right to carry forward and set off the short-working against the excess or surplus of royalties over the Minimum Rent in the subsequent years

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Answer 2

The process of adjusting Short working capital is known as recoupment of short working.

• The money that was already paid out is collected or recovered in the recoupment process.
• The two types of recoupment of short working can be categorized as fixed and floating.
• The fixed recoupment of short working denotes when the owner promises the tenant to compensate the loss for a fixed time.
• But when the owner promises to compensate in coming years that is referred to as floating.

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