How Terra Fortis Supports Counterparty Certainty
Price protection only works if counterparties perform. Here’s how Terra Fortis manages counterparty risk in construction price agreements.
5 Sept 2025
Price certainty is valuable, but only if the agreement performs as expected.
Whenever price protection, index-linked agreements, or overlays are introduced, one question inevitably comes up:
“What happens if the other party doesn’t perform?”
In construction, this concern is justified. Long programmes, tight margins, and unfamiliar financial tools mean trust has to be earned.
At Terra Fortis, counterparty certainty is built into how we structure and support every arrangement.
Our role in every arrangement
Terra Fortis sits between parties to structure, document, and oversee price protection agreements.
We do not simply introduce a tool and step away.
We manage the process, the structure, and the relationships around it.
Where financial settlement is required, we work alongside established, regulated financial institutions who act as execution or settlement partners.
These are organisations with deep experience in managing commodity and financial risk across multiple sectors.
How counterparty risk is managed
Before any agreement is put in place, counterparties are assessed through standard commercial and financial checks, including:
Identity and legal structure verification
Review of trading history and financial standing
Agreement of appropriate collateral or margin, proportionate to risk
This process ensures that:
Both sides are committed
Exposure is understood
Obligations are backed, not assumed
In some cases, existing banking or trade finance arrangements can be used to support participation.
What happens if something goes wrong?
If one party is unable to meet their obligation at settlement, the agreed financial framework ensures the other party is protected.
Settlement is managed through the agreed mechanism, and recovery is handled separately.
You are not left chasing payments.
You are not exposed to operational disruption.
Your position remains intact.
Why this matters in construction
Construction and infrastructure businesses are not financial traders.
They need:
Clear structures
Known counterparties
Predictable outcomes
Counterparty certainty is what turns price protection from a theory into a usable commercial tool.
It allows parties to focus on delivery, not enforcement.
Final word
At Terra Fortis, managing counterparty risk is not an add-on.
It is central to how we operate.
We bring the structure, the oversight, and the right partners to make price risk management workable in a construction context.
It’s not just about protecting price.
It’s about protecting confidence.