Basic Representations - ISDA Provision

2002 ISDA Master Agreement A Jolly Contrarian owner’s manual™ Resources and navigation [[{{{1}}} - 1992 ISDA Provision|This provision in the 1992]] Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project Navigation Preamble | 1 • (a) (b) (c) | 2 • (a) (b) (c) (d) | 3 • (a) (b) (c) (d) (e) (f) (g) | 4 • (a) (b) (c) (d) (e) | 5 • 5(a) Events of Default: 5(a)(i) Failure to Pay or Deliver 5(a)(ii) Breach of Agreement 5(a)(iii) Credit Support Default 5(a)(iv) Misrepresentation 5(a)(v) Default Under Specified Transaction 5(a)(vi) Cross Default 5(a)(vii) Bankruptcy 5(a)(viii) Merger Without Assumption 5(b) Termination Events: 5(b)(i) Illegality 5(b)(ii) Force Majeure Event 5(b)(iii) Tax Event 5(b)(iv) Tax Event Upon Merger 5(b)(v) Credit Event Upon Merger 5(b)(vi) Additional Termination Event (c) (d) (e) | 6 • (a) (b) (c) (d) (e) (f) | 7 | 8 • (a) (b) (c) (d) | 9 • (a) (b) (c) (d) (e) (f) (g) (h) | 10 | 11 | 12 • (a) (b) | 13 • (a) (b) (c) (d) | 14 | Index: Click ᐅ to expand: 2002 ISDA 1992 ISDA Section 3(a) in a Nutshell™ Use at your own risk, campers! 3(a) Basic Representations 3(a)(i) Status. It is duly organised and validly existing under the laws of its jurisdiction and is, where relevant, in good standing; 3(a)(ii) Powers. It has the power to execute, deliver and perform this Agreement and any Credit Support Document to which it is a party and has done everything needed to do so; 3(a)(iii) No Violation or Conflict. Its entry into and performance of this Agreement is not contrary to law, its constitutional documents, or any court or government order or contractual restriction affecting it or its assets; 3(a)(iv) Consents. It has all regulatory approvals needed to enter and perform this Agreement and any Credit Support Document to which it is a party and they remain unconditional and in full force; and 3(a)(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party are its legal, valid and binding obligations, enforceable in accordance with their terms (subject to general laws affecting creditors’ rights and equitable principles). view template Full text of Section 3(a) 3(a) Basic Representations. 3(a)(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing; 3(a)(ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance; 3(a)(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; 3(a)(iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and 3(a)(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)). view template Related agreements and comparisons Click here for the text of Section 3(a) in the 1992 ISDA Click to compare this section in the 1992 ISDA and 2002 ISDA. (But I can save you a click: they are the same.) 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.

Content and comparisons

The Section 3(a) Basic Representations survived intact, to the last punctuation mark, between the 1992 ISDA and the 2002 ISDA. They were that excellent.

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Summary

An observant negotiator (is there any other kind?) handling a 1992 ISDA might wish to add a new agency rep as Section 3(a)(vi). In 2002, ISDA’s crack drafting squad™ obviously thought this was such a good idea that they added a brand-new “no-agency” rep to the 2002 ISDA, only they can’t have felt it was basic enough to go in the Basic Representations, so they put it in a new clause all by itself at Section 3(g).

But you don’t need a bespoke “no-agency” rep if you’re on a 2002 ISDA, if that’s what you’re wondering.

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General discussion

3(a)(v) Obligations Binding

“any Credit Support Document to which it is a party”: Business at the front; party at the back.

Now given that a Credit Support Document will generally be a deed of guarantee, letter of credit or some other third party form of credit assurance from a, you know, third party to which a Party in whose favour it is provided will not be a “party” — and no, an 1995 CSA is not a Credit Support Document, however much it might sound like one, one might wonder what the point would be of mentioning, in this sub-section, Credit Support Documents to which a Party is party.

Well — and this might come as a surprise if you’re an ISDA ingénue; old lags won’t bat an eyelid — there isn’t much point.

But does anyone, other than the most insufferable pedant, really care? I mean why would you write a snippy wiki article about some fluffy but fundamentally harmless language unless you were a stone-cold bore?

Hang on: Why are you looking at me like that?

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See also

• Representations and Warranties Anatomy

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