Template:M summ 2002 ISDA 2(e)

Numbering confusion alert: the 1992 ISDA has a Section 2(e), dealing with Default Interest and other amounts payable by way of compensation for failing to pay or deliver (over and above your Section 6 close out rights). This Section was moved in the 2002 ISDA to Section 9(h). We know not why, but there is sure to have been a reason and it is water under the bridge now.

So as a result there was not, and is not, a Section 2(e) in the 2002 ISDA.

“Condition End Date”

But there might have been. ISDA went through a period of hand-wringing after the global financial crisis, which revealed to the world how unsatisfactory the existing section 2(a)(iii) was.

The idea was to allow the victim of a 2(a)(iii) exercise — that is, the person in putative breach — to preempt the condition precedent, and say to the innocent party, “Well, use it or lose it within 90 days” — the titular Condition End Date.

Well, the moment passed, but some have adopted this as a standard in their schedules — good sports, for the most part — but regulator angst has long since moved on, as did legal eagle appetite to amend swathes of standard contracts for a contingency no-one in their right mind would use, or for that matter can make head or tail of.