Template:Misrepresentation by agent: Difference between revisions

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 But tarry a while. Firstly, your [[investment manager]] will sign as [[agent]], for the [[client]], not on its own behalf. For many this will be an article of profound faith: they will be at some pains, which they will willingly inflict on you, to avoid the barest hint they are speaking for themselves. “When an [[agent]], ''as'' [[agent]] opens its mouth,” they will tell you, “it ''becomes'' its [[principal]] for all purposes that interest the law.”
-And so it does. As far as the [[courts of chancery|Courts of Chancery]] are concerned, to be an [[agent]] is to be wholly [[transubstantiation|transubstantiated]] ''into the person of one’s [[principal]]''. ''Transmogrified''. It is, for all forensic intents to disappear; one’s ghostly outline may still be there, but it is a chimera: one exists only to be the earthly representation of another.
+And so it does. As far as the [[courts of chancery|Courts of Chancery]] are concerned, to be an [[agent]] is to be wholly transubstantiated ''into the person of one’s [[principal]]''. ''Transmogrified''. It is, for all forensic intents to disappear; one’s ghostly outline may still be there, but it is a chimera: one exists only to be the earthly representation of another.
 Which cast a pall over the representations you are being asked to make.
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 :'''Agent (''as itself'')''':  What? ''Here''? In this ''ISDA''? You must be joking. I told you ''under no circumstances'' will I act as [[principal]].
 :'''Broker''' (''A light-bulb comes on''): Aha! I've got it! All right then: can you make [[representations]] ''on behalf of your [[principal]]''?
-:'''Agent (''as [[agent]]'')''' (''Thinks for a moment.''): Why yes! Yes, I can! That’s what I’m here, as [[aget]], to do! What would you like me to represent?
+:'''Agent (''as [[agent]]'')''' (''Thinks for a moment.''): Why yes! Yes, I can! That’s what I’m here, as [[agent]], to do! What would you like me to represent?
 :'''Broker''': Could you represent that your [[investment manager]] is duly authorised by the FCA?
 :'''Agent (''as [[agent]]'')''': WELL HOW THE HELL AM I SUPPOSED TO KNOW THAT??
 :'''Broker''': ''What?''
 :'''Agent (''as [[agent]]'')''':  Look: why don’t you ask the [[agent]]?
+====But seriously====
+Assuming you can persuade your agent to represent, on its own behalf, about itself, as to these matters (whether in the {{ma}} itself or in a side letter):
+*'''Due appointment, [[Authority - Representation|authority]] etc''': This goes to the [[agent]]’s [[ostensible authority]] to bind its principal. If an [[investment manager]] breaches this kind or representation, then worst case the [[broker]] ''risks''<ref>Yes; the whys and wherefores of [[ostensible authority]] are an endless delight; but we can at least say the risk is increased.</ref> ''having no claim at all against the [[fund]]'' – if it can’t make out that there was [[ostensible authority]].
+:*Now if (notwithstanding breach of this rep) the broker ''does'' still have a claim against the fund, then no harm no foul: we shouldn’t need to [[close out]] vs the fund unless/until there’s an independent [[failure to pay]], in which case rely on that. But now we have actual knowledge of the agent’s lack of authority we may find we have a second problem: that there is no ''no-one'' with ostensible authority to bind the fund, and it is drifting rudderless towards a wall. If so, see below.
+:*If we ''don’t'' then our action is necessarily against the [[agent]] in its personal capacity and against its own assets, not the [[fund]]’s. It’s a claim in [[tort]] for [[negligent misstatement]]. Put yourself in the [[fund]]’s position here. Being itself a victim of the [[agent]]’s mendacity it will feel it is [[more sinn’d against than sinning]] and will not see why this should be a {{isdaprov|3(d)}} representation under the {{isdama}}. The [[fund]] will say “well hang on: ''I'' didn’t do anything wrong here: this [[asset manager]] is taking my name in vain without my consent – so how is it that you’re purporting to [[close out]] against ''me''?
+*'''Loss of manager’s regulatory status, no manager, no [[good standing]] etc''': The other typical representations goes to a duly authorised [[manager]]’s continued ability to to act on the fund’s behalf: to manage positions, monitor risk tolerances and keep the ship steady. If the agent goes AWOL a [[[broker]] has some call to reduce risk against the [[fund]]. If the fund is a sports car, the [[broker]]’s ATEs are the measures it can take to prevent the car hitting a wall. As long as here is a competent agent driving the car, the broker can have some confidence the car will avoid walls by itself. If the driver is prevented from steering, the car ''will'', eventually, hit the wall. So it is fair enough for the [[broker]] to say “okay: you are out of control: unless you name a new driver, within a given period ~ ''and here you may treat yourself to a fun exchange with your counterpart about how long that period should be'' ~ we can call this an [[ATE]]”.