Template:Absence of litigation: Difference between revisions
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*'''Credit deterioration''': Litigation that is so monstrous in scope that it threatens to wipe your [[counterparty]] from the face of the earth altogether, while it still owes you under the agreement you’re negotiating. | *'''Credit deterioration''': Litigation that is so monstrous in scope that it threatens to wipe your [[counterparty]] from the face of the earth altogether, while it still owes you under the agreement you’re negotiating. | ||
====Enforceability-threatening | ====Enforceability-threatening [[litigation]]==== | ||
Firstly, Earth to Planet ISDA: what kind of | Firstly, Earth to Planet ISDA: what kind of [[litigation]] or regulatory action — we presume about something unrelated to this agreement since, by your theory, ''it doesn’t damn well exist yet'' — could adversely impact in the ''enforceability'' of this future private legal [[contract]] between one of the litigants and an unrelated, and ignorant, third party? | ||
Search me. But still, I rest assured there will an [[Mediocre lawyer|ISDA boxwallah]] out there somewhere who could [[Chicken Licken|think of something]]. | Search me. But still, I rest assured there will an [[Mediocre lawyer|ISDA boxwallah]] out there somewhere who could [[Chicken Licken|think of something]]. | ||
====Existentially apocalyptic | ====Existentially apocalyptic [[litigation]]==== | ||
Look, if your [[counterparty]] is banged up in court proceedings so awful to behold that an adverse finding might bankrupt it altogether, and your [[Credit department|credit sanctioning team]] hasn’t got wind of it independently then, friend, you have way, way bigger problems than whether you have this feeble covenant in your docs. And, if you are only catching it at all thanks to a carelessly given [[absence of litigation]] rep, by the time said | Look, if your [[counterparty]] is banged up in court proceedings so awful to behold that an adverse finding might bankrupt it altogether, and your [[Credit department|credit sanctioning team]] hasn’t got wind of it independently then, friend, you have way, way bigger problems than whether you have this feeble covenant in your docs. And, if you are only catching it at all thanks to a carelessly given [[absence of litigation]] rep, by the time said [[litigation]] makes itself known to you.<ref>[[Apocalypse|Judgment day]], in other words.</ref> ''won’t it be a bit late''? | ||
====[[Deemed repetition]]==== | ====[[Deemed repetition]]==== | ||
Ah, you might say, but what about the [[deemed repetition]] of this | Ah, you might say, but what about the [[deemed repetition]] of this [[representation]]? Doesn’t that change everything? | ||
What | ===Deemed repetition=== | ||
What of this idea that one not only [[Representations and warranties|represents and warrants]] as of the moment one inks the paper, but also is [[deemed]] to ''repeat'' itself an the execution of each trade, on any day, or whenever a butterfly flaps its wings on [[Fitzcarraldo|Fitzcarraldo’s steamer]]? Do we think it works? Do we? Given how practically '''useless''' even ''explicit'' [[representations]] are, ''does it really matter''? | |||
And, having given it, how are you supposed to ''stop'' a continuing [[representation]] once it has marched off into the unknowable future, like one of those conjured brooms from the ''Sorcerer’s Apprentice''? If you don’t stop it, what then? This may seem fanciful to you, but what are buyside lawyers if not creatures of unlimited, gruesome imagination? Are their dreams not full with flights of just this sort of fancy? Rest assured that, as you do, they will be chewing their nails to the quick in insomniac fever about this precise contingency. | |||
For which reason — it being a faintly pointless [[representation]] in the first place and everything — it might be best just to concede this point when it arises, as inevitably it will. | |||
====Pick your battles==== | ====Pick your battles==== | ||
All that said, and probably for all of the above reasons, parties tend not to care less about this representation | All that said, and probably for all of the above reasons, parties tend not to care less about this [[representation]], so your practical course is most likely to leave it where you find it. | ||
Latest revision as of 13:30, 14 August 2024
Absence of litigation generally
An absence of litigation representation seeks to address litigation carrying two particular risks:
- Enforceability: Litigation that could somehow undermine or prejudice the very enforceability of life was we know it (a.k.a the agreement you are presently negotiating);
- Credit deterioration: Litigation that is so monstrous in scope that it threatens to wipe your counterparty from the face of the earth altogether, while it still owes you under the agreement you’re negotiating.
Enforceability-threatening litigation
Firstly, Earth to Planet ISDA: what kind of litigation or regulatory action — we presume about something unrelated to this agreement since, by your theory, it doesn’t damn well exist yet — could adversely impact in the enforceability of this future private legal contract between one of the litigants and an unrelated, and ignorant, third party?
Search me. But still, I rest assured there will an ISDA boxwallah out there somewhere who could think of something.
Existentially apocalyptic litigation
Look, if your counterparty is banged up in court proceedings so awful to behold that an adverse finding might bankrupt it altogether, and your credit sanctioning team hasn’t got wind of it independently then, friend, you have way, way bigger problems than whether you have this feeble covenant in your docs. And, if you are only catching it at all thanks to a carelessly given absence of litigation rep, by the time said litigation makes itself known to you.[1] won’t it be a bit late?
Deemed repetition
Ah, you might say, but what about the deemed repetition of this representation? Doesn’t that change everything?
Deemed repetition
What of this idea that one not only represents and warrants as of the moment one inks the paper, but also is deemed to repeat itself an the execution of each trade, on any day, or whenever a butterfly flaps its wings on Fitzcarraldo’s steamer? Do we think it works? Do we? Given how practically useless even explicit representations are, does it really matter?
And, having given it, how are you supposed to stop a continuing representation once it has marched off into the unknowable future, like one of those conjured brooms from the Sorcerer’s Apprentice? If you don’t stop it, what then? This may seem fanciful to you, but what are buyside lawyers if not creatures of unlimited, gruesome imagination? Are their dreams not full with flights of just this sort of fancy? Rest assured that, as you do, they will be chewing their nails to the quick in insomniac fever about this precise contingency.
For which reason — it being a faintly pointless representation in the first place and everything — it might be best just to concede this point when it arises, as inevitably it will.
Pick your battles
All that said, and probably for all of the above reasons, parties tend not to care less about this representation, so your practical course is most likely to leave it where you find it.
- ↑ Judgment day, in other words.