Template:M summ 2002 ISDA 5(c): Difference between revisions

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A {{isdaprov|Force Majeure Event}} is something that is so beyond one’s control or expectation that it shouldn’t count as an {{isdaprov|Event of Default}} or even a {{isdaprov|Termination Event}} ''at all'' — at least until you’ve had a chance to sort yourself out, fashion a canoe paddle with a Swiss Army knife, jury-rig an aerial and get reconnected to the world wide web.
A {{isdaprov|Force Majeure Event}} is something that is so beyond one’s control or expectation that it shouldn’t count as an {{isdaprov|Event of Default}} or even a {{isdaprov|Termination Event}} ''at all'' — at least until you’ve had a chance to sort yourself out, fashion a canoe paddle with a Swiss Army knife, jury-rig an aerial and get reconnected to the world wide web.
===Non-[[Repudiatory breach|repudiatory]] {{isdaprov|Breach of Agreement}}===
===Non-[[Repudiatory breach|repudiatory]] {{isdaprov|Breach of Agreement}}===
Note that the subordination of events of default to illegality in section 5(c)(i) specifically excludes a repudiatory breach of agreement as contemplated under the newly introduced section 5(a)(ii)(2). Why? Well, if you have repudiated the contract — that is to say, point-blank ''refused'' to perform its clear terms — and, by lucky hap, your repudiation coincides with an {{isdaprov|Illegality}}, then your counterparty should not be obliged to give you the benefit of the doubt and have to close you out via the more genteel route of an {{isdaprov|Illegality}} {{isdaprov|Termination Event}}. If you’ve thrown your toys out of the pram, expected to be spanked, that is to say.<ref>It ought to go without saying that the [[Jolly Contrarian]] does not condone corporal punishment to wanton boys, although it never did him any harm.</ref>
Note that the subordination of {{isdaprov|Events of Default}} to {{isdaprov|Illegality}} and {{isdaprov|Force Majeure}} in section {{isdaprov|5(c)(i)}} are specifically excludes a [[Repudiatory breach|repudiatory]] Breach of Agreement as contemplated under the newly introduced section 5(a)(ii)(2), and any {{isdaprov|Credit Support Default}} other than a direct, and non-[[Repudiatory breach|repudiatory]], default by the {{isdaprov|Credit Support Provider}}. Why? Well, firstly this is about unitary Events ofDefault which are ''directly caused by'' {{isdaprov|Illegality}} or {{isdaprov|Force Majeure}}, not simply ones which are coincidental with them, and secondly, if you have actually [[Repudiation|repudiated]] the contract — that is to say, point-blank ''refused'' to perform its clear terms — and, by lucky hap, your [[repudiation]] coincides with an {{isdaprov|Illegality}}, then your counterparty should not be obliged to give you the benefit of the doubt and have to close you out via the more genteel route of an {{isdaprov|Illegality}} {{isdaprov|Termination Event}}.  
 
If you’ve thrown your toys out of the pram, expected to be spanked, that is to say.<ref>It ought to go without saying that the [[Jolly Contrarian]] does not condone corporal punishment to wanton boys, although it never did him any harm.</ref>
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