Template:Transaction injunctions

There is at least a colour of an argument that the rights protected by a confidentiality undertaking are ineffable enough to be beyond the remedial powers of contractual damages. That argument is harder to make out for amounts due under a market transaction — a swap, option, forward, loan or repo. That won’t stop fastidious legal eagles trying.

When we are trading financial products, we check our emotional lives at the door. Our personal sensibilities are not at stake: the moment we step onto that trading floor we become self-interested merchants in the bare sense Adam Smith had in mind; profit is our only motive, and the sole propeller of the invisible guiding hand — we leave our peace-time roles as husbands, wives, parents, Rotarians, lay preachers, and members of the church choir. We are homo economici.

Take the failure to meet a re-delivery obligation under a stock loan. The security in question has an observable price, by which you can track your loss in not having it delivered on time. You may incur financing costs while you wait; you may be bought in by your own counterparties further down the line: all these are reasonably foreseeable consequences of non-performance. so foreseeable, in fact, that they are enshrined in the very terms of the 2010 GMSLA. There is no need to go to the court for damages, let alone equitable relief: you may buy in your self, and pass the costs to your counterparty. The contract says so in black and white. but more to the point, a counterparty who has failed — assuming it has not simply forgotten — will have failed for a simple reason. It hasn’t got the security in question, and it can’t locate it in the market. These things happen from time to time. So what good is an equitable injunction compelling a poor fellow to perform an obligation to deliver a security she plainly does not have?