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Template:Isda 3(d) gen: Difference between revisions
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The object of a legal opinion is to confirm the accuracy of a legal representation. Instead of simply representing that, for example, you have the regulatory permission to act as a swap dealer, you have a legal opinion to confirms that fact, from one who should know. If what that that legal opinion says is not true — if that one who ''should'' know in fact does not — then regardless of whose fault this is, or how egregious has been her negligence in being at fault, the regulatory permission required does not obtain, and the comfort your counterparty seeks from that legal opinion is misplaced. The representation is false, and the counterparty should be allowed out as a result. | The object of a legal opinion is to confirm the accuracy of a legal representation. Instead of simply representing that, for example, you have the regulatory permission to act as a swap dealer, you have a legal opinion to confirms that fact, from one who should know. If what that that legal opinion says is not true — if that one who ''should'' know in fact does not — then regardless of whose fault this is, or how egregious has been her negligence in being at fault, the regulatory permission required does not obtain, and the comfort your counterparty seeks from that legal opinion is misplaced. The representation is false, and the counterparty should be allowed out as a result. | ||
====Credit Support | ====|Credit Support Documents==== | ||
We imagine here the perceived fear is that a | We imagine here the perceived fear is that a {{{{{1}}}|Credit Support Document}}, being an executed [[legal contract]], does not ''have'' a truth or falsity independent of itself the bargain it represents and evidences, so cannot really be a misrepresentation. But in a funny sense a legal contract ''constitutes'' the agreement it evidences: sure; the legal accord is an immaterial, intellectual thing, a ''[[consensus ad idem]]'' that inhabits the incarcerated space that separates us, and it cannot be fully delimited by mortal, combustible paper.<ref>We have written a long and tiresome essay about this [[Contract|elsewhere]].</ref> But all the same, its written form can hardly contradict it. If the written agreement incontrovertibly says “I must go ''up''” our legal compact can hardly require me to go ''down''; the paper format surely constrains what one can take from, or give to, a contract. | ||
That being the case, there is not really a meaningful sense in which a contract | That being the case, there is not really a meaningful sense in which a contract can “misrepresent” the actual accord it represents. or be “false”. There is something faintly, but elusively, paradoxical about this. | ||
What might happen is that a counterparty submits a form that has been superseded, or terminated and thus is a husk of | What ''might'' happen is that a counterparty submits a form that has been superseded, or terminated and thus is but a ''husk'' of an ''ex''-contract; one that once existed but now does not. Alternatively, a truly mendacious counterparty might offer up a form that is not really a contract, or even evidence of one, at all: a forgery, or a fraud. | ||
But in those cases, the operating cause of the falsehood is the party submitting the document, not the document offered by way of representation itself, and in each an innocent party is better protected if Section {{{{{1}}}|3(d)}} Representation does apply. | |||