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-===More on covered by the Section 3(d) Representation===
+===More on “covered by the Section 3(d) Representation”===
 We went digging a little deeper. These are the only examples we could find before we got bored looking. In each case we are not persuaded these caveats accommodate anyone other than our value-adding learned friends:
 ====Legal opinions====
-We suppose this is excluded because the Party to the ISDA is not the author of the legal opinion, nor professionally competent to pass on its contents (hence the need for the legal opinion in the first place), so should hardly be expected to be held to account should it turn out to be wrong.
+Should a legal opinion issued by a third party who is not party to the agreement, or even affiliated with it, have to be true in the Section {{{{{1}}}|3(d)}} sense?
-But this, we submit, is to misunderstand in a profound way the point of a legal contract. Unlike criminal or even tort law, the law of contract is not an instrument of moral judgment. It cares only about economics: that one does, or does not, do what one has promised or — as in this case — that what one has represented to you is, or is not, true. The law of contract is broadly incurious about ''why''.
+The predictable response is for the counterparty to say, “look: [[I’m not a lawyer]], okay, so it can hardly be on me if the legal advice I get [[in good faith]] happens to be wrong?” We suppose this is excluded because the Party to the ISDA is not the author of the legal opinion, nor professionally competent to pass on its contents (hence the need for the legal opinion in the first place), so should hardly be expected to be held to account for it.
-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.
+This may be expressed to you, [[Dissonance|dissonantly]], in the honeyed prose of a [[private practice lawyer]] — a vernacular foreign to most ISDA [[negotiator]]s. You may wonder whether it has not been disingenuously spoon-fed to your counterpart by just such a fellow. We will not speculate. But we will observe that, while it may ''seem'' compelling at first, it is ''bad'' logic. It presumes that what matters is the probity with which a counterparty conducts itself; that it acts [[in good faith]] and with a benign disposition; that its “good chapness” —the basic honesty it shows when dealing with its market counterparties — is beyond reproach.
-====Credit Support documents====
-We imagine here the perceived fear is that a credit support document, being executed legal contract does not ''have'' a truth or falsity independent of itself the bargain it represents and evidences, but in a funny sense ''constitutes'' the agreement. Sure; the legal accord is an immaterial, intellectual thing, a ''[[consensus ad idem]]'' that inhabits the incarcerated space that separates us, and cannot be fully delimited by mortal, combustible paper. 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.
+But this, we submit, is to misunderstand in a profound way the ''point'' of a commercial contract. There are no ethicists in a foxhole. Unlike criminal or even [[tort]] law, the law of contract is not an instrument of moral judgment. It cares only about economics: that one does, or does not, do what one has promised or — as in this case — that what one has represented to you is, or is not, true. The [[Contract|law of contract]] is broadly incurious about ''why''.
-====Annual reports====
+What matters is the economic consequence of a falsity — the ''[[actus reus]]'', not one’s ''[[mens rea]]''. 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.
+Now, if I have engaged in a trading arrangement with you on the presumption that you are appropriately permissioned, licenced, and constitutionally able to enter into valid and binding swap contracts, and you satisfy my qualms by proffering the legal opinion of some respectable attorney-about-town you have found who will say it is so, and that attorney turns out to be ''wrong'', my commercial position is no less parlous just because you weren’t to know your legal advisor was a clot. Regardless of whose fault it was, or how egregious was her negligence in ''being'' at fault, if the required regulatory permission does not exist, the comfort I seek is misplaced. I now have a portfolio of swaps which may not be enforceable. My claims may be suspended at any minute.
+''I want out before that can happen''. I might wish you well, and bitterly regret it were not otherwise, but it is ''not'' otherwise. I need out. If that causes you some embarrassment, inconvenience or financial loss, then the person to whom you should look for redress ''is your lawyer''.
+Not for the first time, the “market standard,” for no reason other than it is a legal question and there is no-one else around qualified to gainsay it, is crafted to suit the personal interests of the [[Community|opining legal community]]. Have no truck with this, fellows.
+====Credit Support Documents====
+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 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 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.
+{{3(d) audited financial statements|{{{1}}}}}