Template:M summ 2002 ISDA 5(a)(ii): Difference between revisions
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All rendered in {{icds}}’s lovingly tortured prose, of course: note a [[double negative]] extragvaganza in {{isdaprov|5(a)(ii)}}(1): '''not''' complying with an obligation that is '''not''' (''[[inter alia]]'') a payment obligation if '''not''' remedied within a month. High five, team ISDA. | All rendered in {{icds}}’s lovingly tortured prose, of course: note a [[double negative]] extragvaganza in {{isdaprov|5(a)(ii)}}(1): '''not''' complying with an obligation that is '''not''' (''[[inter alia]]'') a payment obligation if '''not''' remedied within a month. High five, team ISDA. | ||
=== {{isdaprov|Hierarchy of Events}}=== | === {{isdaprov|Hierarchy of Events}}=== | ||
Note that a normal Section 5(a)(ii)(1) {{isdaprov|Breach of Agreement}} that also comprises a Section 5(b)(i) {{isdaprov| | Note that a normal Section 5(a)(ii)(1) {{isdaprov|Breach of Agreement}} that also comprises a Section 5(b)(i) {{isdaprov|lllegality}} or a Section 5(b)(ii) {{isdaprov|Force Majeure}} {{isdaprov|Termination Event}} will, courtesy of section {{isdaprov|5(c)}}, be treated as the latter, but a ''[[Repudiatory breach|repudiatory]]'' {{isdaprov|Breach of Agreement}} under section {{isdaprov|5(a)(ii)}}(2) willl not enjoy the same leniency. If you have repudiated your contract, the fact that there happens to be a concurrent {{isdaprov|Illegality}} — it is hard to see how a repudiatory breach could be an {{isdaprov|Illegality}} ''in itself'' — will not save you from the full enormity of section {{isdaprov|5(a)(ii)}} {{isdaprov|Event of Default}} style close out. | ||
Revision as of 09:08, 13 April 2020
A failure to perform any agreement, if not cured within 30 days, is an Event of Default, except for:
- (i) those failures which already have their own special Event of Default (i.e., Failure to Pay or Deliver under Section 5(a)(i)) or
- (ii) those that relate to tax, and which mean the party not complying will just get clipped for tax it rather would not.
These are the boring breaches of agreement: those of a not immediately existential consequence to a derivative relationship (like Failure to Pay or Deliver, or a party’s outright Bankruptcy) but which, if not promptly sorted out, justify shutting things down with extreme prejudice.
All rendered in ISDA’s crack drafting squad™’s lovingly tortured prose, of course: note a double negative extragvaganza in 5(a)(ii)(1): not complying with an obligation that is not (inter alia) a payment obligation if not remedied within a month. High five, team ISDA.
Hierarchy of Events
Note that a normal Section 5(a)(ii)(1) Breach of Agreement that also comprises a Section 5(b)(i) lllegality or a Section 5(b)(ii) Force Majeure Termination Event will, courtesy of section 5(c), be treated as the latter, but a repudiatory Breach of Agreement under section 5(a)(ii)(2) willl not enjoy the same leniency. If you have repudiated your contract, the fact that there happens to be a concurrent Illegality — it is hard to see how a repudiatory breach could be an Illegality in itself — will not save you from the full enormity of section 5(a)(ii) Event of Default style close out.