Amendments - ISDA Provision

2002 ISDA Master Agreement A Jolly Contrarian owner’s manual™ Go premium Overview — Summary — Premium — See also — Wikitext Crosscheck: →’87 equivalent →’92 equivalent →’02 equivalent 9(b) in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here. Original text 9(b) Amendments. An amendment, modification or waiver in respect of this Agreement will only be effective if in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system. See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA. The Varieties of ISDA Experience Subject 2002 (wikitext) 1992 (wikitext) 1987 (wikitext) Preamble Pre Pre Pre Interpretation 1 1 1 Obligns/Payment 2 2 2 Representations 3 3 3 Agreements 4 4 4 EODs & Term Events 5 Events of Default: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • FM • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUSS • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM Early Termination 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations; Payment Date • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments on ET Transfer 7 7 7 Contractual Currency 8 8 8 Miscellaneous 9 9 9 Offices; Multibranch Parties 10 10 10 Expenses 11 11 11 Notices 12 12 12 Governing Law 13 13 13 Definitions 14 14 14 Schedule Schedule Schedule Schedule Termination Provisions Part 1 Part 1 Part 1 Tax Representations Part 2 Part 2 Part 2 Documents for Delivery Part 3 Part 3 Part 3 Miscellaneous Part 4 Part 4 Part 4 Other Provisions Part 5 Part 5 Part 5 Resources and Navigation Index: Click ᐅ to expand: ISDA

Comparisons

Section 9(b) is, as far as makes any difference whatsoever unchanged between the 1992 ISDA and the 2002 ISDA. There are some formalistic changes, but — you know.

Basics

ISDA’s crack drafting squad™ takes a clause which didn’t really need to be said, and converts it into a monster. If we convert this to symbolic logic it must mean this:

Effective amendment or waiver =In writing AND [EITHER executed by each party OR confirmed by exchange of [EITHER Telex OR electronic message]]

“In writing” means recorded for posterity, in words ingestable by means of the eyes, as opposed to the ears. This is not the OED definition, I grant you — I made it up just now — but it zeroes in on the immutable fact that, whether it is on parchment, paper, cathode ray tube, LED screen or electronic reader, you take in writing by looking at it. Not “orally” — from the mouth — or for that matter, “aurally” — through the ears — nor, in the JC’s favourite example, via semaphore — by a chap waving flags from a distant hill — but in visible sentences, made up of visual words.

Sentences. Words. Mystic runes carved upon the very living rock. Anything else? Could “writing” include memes? GIFs? Emojis? We suppose so — but do you “write” them, as such? — but to the wider question “can communications apprehended visually but of a non-verbal nature be contractually significant?” the answer is undoubtedly yes.

Acceptance, to be legally binding, need not be “in writing”. Nor “orally”. Acceptance just needs to be clear. Whether one has accepted is a matter for the laws of evidence. There is little doubt that one who has signed, sealed and delivered a parchment deed by quill in counterpart has accepted its contents — it is about as good evidence as you could ask for, short of the fellow admitting it in cross-examination — but a merchant need not, and often does not, reach this gold standard when concluding commercial arrangements about town.

Who has not stumbled morosely into the newsagent of a Sunday morning, wordlessly pushed a copper across the counter and left with a copy of The Racing Post, not having exchanged as much as a glance with the proprietor? Do we doubt for an instant that a binding contract was formed during that terse interaction?

There is, in theory, a whole ecosystem of non-verbal communications — winks, nods, wags, shaken heads, facial tics and cocked eyebrows — and nor should we forget, those who stand on distant hills and communicate by smoke signal, Greek heroes who miscommunicate their safe return by sail colour or modern admirals who transmit instructions to the fleet using a flag sequence.

Any of these can, in theory, convey offer, acceptance and consideration as well can a written or oral communication.

Emojis

The King’s Bench of Saskatchewan — not an English court to be sure, but of persuasive value, especially when speaking this much sense — has recently affirmed the JC’s conviction about emojis 😬.

In an argument about whether a merchant was bound to supply a consignment of flax on the back of an exchange of SMS messages.

The plaintiff drew up a contract to purchase SWT 86 metric tonnes of flax from the defendant, wet-signed it, took a photo of the contract and texted the photo to the defendant with the text message: “Please confirm flax contract”.

The defendant texted back “👍”.

The defendant didn’t eventually deliver the flax, and by the time the plaintiff could source alternative flax prices had gone up. The plaintiff claimed damages.

The defendant argued the thumbs-up emoji simply confirmed that he received the Flax contract but was not acceptance of its terms. He claimed he was waiting for the full terms and conditions of the Flax Contract to review and sign. Partly on the basis of a prior course of dealing with deals done on monosyllabic text messages, the court wasn’t having it:

“This court readily acknowledges that a 👍 emoji is a non-traditional means to “sign” a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a “signature” – to identify the signator ... and as I have found above – to convey ... acceptance of the flax contract.

I therefore find that under these circumstances that the provisions of [the Canadian Sale of Goods Act 1978] have been met and the flax contract is therefore enforceable. ”

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See also

• Greenclose v National Westminster Bank plc, on whether email is an electronic messaging system;
• Rock Advertising Limited v MWB Business Exchange Centres Limited on whether one can orally amend a contract with a “no oral modification” clause