Tolerance Limit in the Exchange Trades
Quarterly Journal of Securities Exchange

Quarterly Journal of Securities Exchange

Tolerance Limit in the Exchange Trades

Authors
Abstract
According to the rules of transaction and settlement in the exchange, the subject of contract can be delivered within the tolerance limit (the range within which the delivery unit of the commodity can be accepted or considered as good for delivery on the exchange platform). In the other words, the seller may deliver the commodity, less or more than the amount mentioned in offer announcement. If the commodity delivered was less than the obliged quantity, the seller must return surplus amount and if the commodity exceeded, the buyer must pay for the differentials. Considering the ambiguities about certainty of subject matter in this case and considering the general rules and regulations (Civil Code, Article 384), we describe the tolerance limit’s scope, concepts and rules then survey the rights to terminate the contract in these cases and the role of intent in the matter.
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