Template:M summ 1992 ISDA 5(c): Difference between revisions

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Compared with its Byzantine equivalent in section {{isdaprov|5(c)}} of the {{2002ma}} this is a Spartan cause indeed: in 1992 {{icds}} assumed all ISDA users would be cold, rational economists who instinctively appreciate the difference between [[causation]] and [[correlation]] — or hadn’t considered the virtual certainty that they might not be — and therefore did not spell it out, but we will: Section {{isda92prov|5(c)}} will help you out where your {{isda92prov|Event of Default}} is itself, and ''of'' itself, ''the'' {{isda92prov|Illegality}}, but it will not help where your {{isda92prov|Breach of Agreement}} simply is ''coincidental'' with one.
{{isda 5(c) summ|isda92prov}}
==={{isda92prov|Force Majeure}} upgrade===
Note if you have retrofitted a {{isda92prov|Force Majeure}} clause (as is common amongst latter-day users of the {{1992ma}}) you will have quite the [[tedious]] job wiring the consequences of your new {{isda92prov|Force Majeure}} events into the existing close-out mechanics in the {{1992ma}} preprint, which doesn’t contemplate [[force majeure]] but will have to. You could always use the [http://www.isda.org/2012illegalityprot/docs/ISDA_Protocol_-_Adoption_of_2002_Illegality_FM_provisions_Final.pdf ISDA Illegality and Force Majeure Protocol] for that, of course.

Latest revision as of 15:35, 27 December 2023

Compared with its Byzantine equivalent in the 2002 ISDA the 1992 ISDA is a Spartan cause indeed: it is as if ISDA’s crack drafting squad™ assumed all ISDA users would be cold, rational economists who instinctively appreciate the difference between causation and correlation — or hadn’t considered the virtual certainty that they would not be — and therefore did not spell out that where your Event of Default is itself, and of itself, the Illegality, this hierarchy clause will intervene but it will not where your it simply is coincidental with one. I.e., if you were merrily defaulting under the ISDA Master Agreement anyway, and along came an Illegality impacting your ability to perform some other aspect of the Agreement, you can’t dodge the bullet.

In the 2002 ISDA the JC thinks he might have found a bona fide use for the awful legalism “and/or”. What to do if the same thing counts as an Illegality and/or a Force Majeure Event and an Event of Default and/or a Termination Event.

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