1992 ISDA Master Agreement
A Jolly Contrarian owner’s manual
Section 5(b)(i) in a Nutshell™
Use at your own risk, campers!
Section 5(b)(i) in full
- 5(b)(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):
- 5(b)(i)(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or
- 5(b)(i)(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;
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Template:M comp disc 2002 ISDA 5(b)(i)
1992 User Guide
Section 5(b)(i) provides that a Termination Event will occur if it becomes unlawful for a party (or if relevant its Credit Support Provider) to:
The party to whom the Illegality has occurred will be the “Affected Party”. This Termination Event excludes breach by a party of its Section 4(b) obligation to maintain authorizations necessary under a 1992 ISDA or any Credit Support Document. Any such breach thus will be treated as an Event of Default and not an Illegality.
This Termination Event has been modified from the 1987 ISDA to refer to physically-settled transactions and to replace the reference to “Specified Entity” in the corresponding provision of the 1987 ISDA with “Credit Support Provider” because clause (2) of Illegality relates to Credit Support Documents.
Section 5(c) provides that an Event of Default with is also an Illegality will be treated as an Illegality.
Template:M gen 1992 ISDA 5(b)(i)
Template:M sa 1992 ISDA 5(b)(i)