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| Can you understand the rationale for this representation? Sure.
| | {{Isda 3(b) summ|isdaprov}} |
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| Does it do any practical good? No.
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| A [[No event of default or potential event of default - Representation|No EOD rep]] is a classic [[loo paper rep]]: soft, durable, comfy, absorbent — super cute when a wee Labrador pub grabs one end of the streamer and charges round your Italian sunken garden with it — but as a [[credit mitigant]] or a genuine contractual protection, only good for wiping your behind on.
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| Bear in mind you are asking someone — on pain of them being found in [[Fundamental breach|fundamental breach of contract]] — to swear to you they are not already in [[fundamental breach]] of {{t|contract}}. Now, how much comfort can you genuinely draw from such promise? Wouldn't it be better if your [[credit]] team did some cursory [[due diligence]] to establish, independently of the say-so of the prisoner in question, whether there are grounds to suppose it might be in [[fundamental breach]] of {{t|contract}}?
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| Presuming there are not — folks tend not to publicise their own defaults on private {{t|contract}}s, after all — the real question here is, “do I trust my counterparty?” And to that question, any answer provided by the person whose trustworthiness is in question, carries exactly no informational value. All cretins are liars.<ref>I know, I know.</ref>
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| So, let’s say it turns out your counterparty ''is'' lying; there is a pending private [[event of default]] it knew about and you didn’t. Now what are you going to do? Righteously detonate your contract on account of something of which ''by definition you are ignorant''?
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| Have fun, counselor.
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