(1) This section deals with the situation in which a party to a * scheme has a right or option to terminate the scheme early (whether by discharging an obligation early, converting the interest arising from the scheme into another interest or otherwise).
Note 1: An example of terminating a scheme early by discharging an obligation early is terminating a loan by discharging the obligation to repay the principal (and any outstanding interest) early.
Note 2: In certain circumstances, conversion of an interest into another interest can terminate its life (see section 974- 45).
(2) The existence of the right or option is to be disregarded in working out the length of the life of the interest arising from the * scheme for the purposes of this Subdivision if the party does not have an * effectively non-contingent obligation to exercise the right or option.
(3) If the party does have an * effectively non-contingent obligation to exercise the right or option, the life of the interest ends at the earliest time at which the party will have to exercise the right or option.
(4) This section does not limit subsection 974-35(2).