Assessment and Understanding - ISDA Provision

2002 ISDA Master Agreement A Jolly Contrarian owner’s manual™ Resources and navigation [[{{{1}}} - 1992 ISDA Provision|This provision in the 1992]] Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project Navigation Preamble | 1 • (a) (b) (c) | 2 • (a) (b) (c) (d) | 3 • (a) (b) (c) (d) (e) (f) (g) | 4 • (a) (b) (c) (d) (e) | 5 • 5(a) Events of Default: 5(a)(i) Failure to Pay or Deliver 5(a)(ii) Breach of Agreement 5(a)(iii) Credit Support Default 5(a)(iv) Misrepresentation 5(a)(v) Default Under Specified Transaction 5(a)(vi) Cross Default 5(a)(vii) Bankruptcy 5(a)(viii) Merger Without Assumption 5(b) Termination Events: 5(b)(i) Illegality 5(b)(ii) Force Majeure Event 5(b)(iii) Tax Event 5(b)(iv) Tax Event Upon Merger 5(b)(v) Credit Event Upon Merger 5(b)(vi) Additional Termination Event (c) (d) (e) | 6 • (a) (b) (c) (d) (e) (f) | 7 | 8 • (a) (b) (c) (d) | 9 • (a) (b) (c) (d) (e) (f) (g) (h) | 10 | 11 | 12 • (a) (b) | 13 • (a) (b) (c) (d) | 14 | Index: Click ᐅ to expand: 2002 ISDA 1992 ISDA Section Assessment and Understanding in a Nutshell™ Use at your own risk, campers! (2) Assessment and Understanding. It can assess the merits and understand (with professional advice if needed), and understands and accepts the terms and risks of the Transaction and can and does assume them. view template Full text of Section Assessment and Understanding (2) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction. view template Related agreements and comparisons Click here for the text of Section Assessment and Understanding in the 1992 ISDA Template:Isdadiff Assessment and Understanding Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Content and comparisons

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Summary

Having assured the assembled that you have understood the Transaction and taken such advice as you need to determine that it is suitable, this representation allays the lingering existential doubt your counterparty might have that, notwithstanding your status (represented/determined elsewhere) as a qualified institutional buyer, professional client, institutional investor or whatever other designation of competence a regulator might habitually expect, you might still be so stupid as to not understand that you don’t understand the Transaction, or the professional advice you have obtained about that Transaction. One gets comfort by a follow on rep that one is capable of understanding the merits and risks of the transaction. Neat, tidy, and job done...

... except there is a whopping great elephant there, standing on a stack of turtles. For how are we supposed to know whether you are capable of determiningwhether you are capable of understanding the merits of the transaction?

Fortunately the ’squad — and knowing them as we do, we feel they must have been sorely tempted to keep going at least for a little bit, just to see where it took them — eschewed the opportunity to jump down that rabbithole, and executed a deft, and quite uncharacteristic, kick to touch.

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General discussion

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See also

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References

A preprinted Additional Representation that forms part of the Relationship Between Parties trifecta. It will go unremarked upon by all but the most bored (or ill-advised) negotiator.