Template:M summ 1992 ISDA Force Majeure Event

Section 5(b)(ii) in the 1992 ISDA

There is no equivalent to the Force Majeure Event in the 1992 ISDA. An Impossibility clause was frequently written into the Schedule, which endeavoured to do the same thing. One can incorporate Force Majeure into the 1992 ISDA as long as you carry the concept through to its logical conclusion i.e.:

• Include a Hierachy of Events;
• Consider the impact re a deferral of Early Termination Amount etc.

The concept also impacts the basis of Close Out because the 2002 ISDA requires use of true mids for valuation i.e, not the mean of each party's view of the bid/offer where a Force Majeure Event (or Illegality) occurs, which is effectively what you get under the 1992 ISDA with a “Two Affected Parties” option.