Template:M comp 2002 ISDA 10(a)

A seldom-regarded but basically potty representation thrown in to allow parties to represent that if it trades through a minor branch, recourse against it will be no different from the recourse it would have had it traded though its head office.

Law students of all vintages will remember from Company Law class that this is necessarily the case: this is what the legal fiction of the “corporate legal personality” is designed to do: create a new, unitary “person” who is liable at law, can sue and be sued, live, love and survive independently of its stakeholders, for anything done in the name of that company — as long as intra vires and properly authorised by the company, regardless of where and through whose agency it is done.

Now it may be the case that certain primitive jurisdictions, for certain primitive entity types, this is not the case but, if so, the answer ought to be do not trade with entities like that or, if you really must, do not trade with entities like that out of branches that won’t bind the legal entity.

There is a chicken-and-egg problem here: if you do, then Q.E.D. the entity is not bound. Yes, you may be left with an action for damages (in tort — there is no contract, remember) for misrepresentation, but we think the better approach is for your onboarding and credit sanctioning teams to do their due diligence before you start trading, and avoid trading with entities like this.