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In which {{icds}} grapple with the existential question: if I [[close out]] all my {{{{{1}}}|Transaction}}s because the other guy fundamentally [[Breach of contract|breached the contract]], can I still rely on the good bits of the contract to manage my risk position and enforce my bargain? | In which {{icds}} grapple with the existential question: if I [[close out]] all my {{{{{1}}}|Transaction}}s because the other guy fundamentally [[Breach of contract|breached the contract]], can I still rely on the good bits of the contract to manage my risk position and enforce my bargain? | ||
We are deep into [[Ontology|ontological]] territory here, fellows | We are deep into [[Ontology|ontological]] territory here, fellows. | ||
Why | {{Event of default vs fundamental breach}} | ||
===Netting and close-ou=== | |||
Why should this matter here? Well, because ''[[netting]]'', in a word. Here the fabulous nuances of the {{isdama}} come into play. [[Close-out netting]] — as we all know, a clever if somewhat artificial and, in practical application, quite [[tedious]] concept — is not something that just happens by operation of the [[common law]]. [[Set-off]], which does, is a narrower and flakier thing requiring all kinds of mutuality that might not apply to your {{isdama}}. | |||
The contractual device of [[close-out netting]], by contrast, relies on the patient midwifery of {{icds}} and the sophisticated contrivances they popped into the {{isdama}}: especially the parts that say all {{{{{1}}}|Transactions}} form a {{{{{1}}}|Single Agreement}}, and those long and dusty passages in Section {{{{{1}}}|6}} which painfully recount how one terminates those {{isdaprov|Transaction}}s and nets down all the resulting exposures should things go tits up. | The contractual device of [[close-out netting]], by contrast, relies on the patient midwifery of {{icds}} and the sophisticated contrivances they popped into the {{isdama}}: especially the parts that say all {{{{{1}}}|Transactions}} form a {{{{{1}}}|Single Agreement}}, and those long and dusty passages in Section {{{{{1}}}|6}} which painfully recount how one terminates those {{isdaprov|Transaction}}s and nets down all the resulting exposures should things go tits up. |