Amendments - ISDA Provision

ISDA Anatomy™ →Go uptown In a Nutshell™ Section 9(b): 9(b) Amendments. An amendment of, or waiver given under, this Agreement will only be effective if in writing and executed by each of the parties otherwise suitably electronically confirmed. view template 2002 ISDA full text of Section 9(b): 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. view template Click here for the text of Section 9(b) in the 1992 ISDA Index: Click ᐅ to expand: ISDA Navigation 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 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.

Three lookouts here.

One: according to her majesty’s judiciary, email is not included and does not count as an electronic messaging system. Let your klaxons blare. It seems absurd at first glance — some would say it seems absurd having read the whole judgment in Greenclose v National Westminster Bank plc — but there it is: that is the law of the land at the time of writing.

Two: This might not so much matter were it not for another spectacular outing for her majesty's judiciary, in which Lord Sumption decided that a “no oral modification” clause means what it says. Hitherto is has been assumed to be an easy give to pedantic lawyers who have nothing more constructive to say. Strictly interpreting a NOM clause probably makes sense if you are contemplating the eternal verities on the hard benches of a law library — or your judicial chambers — but it makes none if your job is to manage the cut and thrust of daily operational contract management.

To be sure, most financial institutions have a military-industrial complex handling the negotiation of ISDA Master Agreements and other trading contracts, so a formal amendment is not likely to pass with copperplate script execution. But where the Agreement contains a manifest error, and the parties perform notwithstanding to the intended commercial bargain - who can say?

And as for waivers — especially when your credit department is in the thrall of setting NAV triggers it doesn’t monitor and isn’t likely to to exercise — by the lights of this clause you must formally confirm them in writing, which is a profound waste of everyone’s time.

Three: Good luck reconciling the above with the Counterparts and Confirmations clause, which says, rightly, that the binding action on a Transaction is the moment the parties first agree it — that is, as likely as not, a phone call or Bloomberg chat, or in volume products, an electronic handshake between booking systems. Since a Transaction is a modification to the ISDA Master Agreement the words above ring a bit hollow.

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

9 Miscellaneous

9(a) Entire Agreement
9(b) Amendments
9(c) Survival of Obligations
9(d) Remedies Cumulative
9(e) Counterparts and Confirmations
9(f) No Waiver of Rights
9(g) Headings
9(h) Interest and Compensation (2002 ISDA only)