Amendments - ISDA Provision

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ISDA Anatomy™


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.
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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.
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Click here for the text of Section 9(b) in the 1992 ISDA

Index: Click to expand: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: FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA Termination Events: IllegalityFMTax EventTEUMCEUMATE 5 Events of Default: FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA Termination Events: IllegalityTax EventTEUMCEUMATE 5 Events of Default: FTPDBreachCSDMisrepDUSSCross DefaultBankruptcyMWA Termination Events: IllegalityTax EventTEUMCEUM
Early Termination 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculations; Payment DatePayments on ETSet-off 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculationsPayments on ETSet-off 6 Early Termination: ET right on EODET right on TEEffect of DesignationCalculationsPayments 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
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Three lookouts here.

One: according to her majesty’s judiciary, email does not count as an electronic messaging system. Let your klaxons blare. It seems absurd at first glance — Jolly Contrarian 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[1], in which Lord Sumption decided that a “no oral modification” clause is effective in law. This probably makes sense if you are sitting in a law library, or judicial chambers, contemplating the eternal verities, but it makes none if you are managing the cut and thrust of operational contract management.

That said, most financial institutions have an industrial complex covering 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 contract has 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 — are a different story.

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

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)