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Commercially reasonable manner: Difference between revisions
Commercially reasonable manner (view source)
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In good faith and in a commercially reasonable manner | In good faith and in a commercially reasonable manner cuts the crap - it promises (faintly) to unlock a lot of negotiations and takes much of the line-by-line lawyering out of the others. It only presents heightened litigation risk to clients who don’t trust you, or whom you don't trust, and in either of those cases your problem is not that you have a good faith obligation; it’s that you have a lousy client relationship. It hardly adversely affects litigation risk in any case: A dissatisfied client will take action, and there are plenty of legal devices it can use to imply or insert a requirement for reasonableness in any case. | ||
Note also: | Note also: | ||
*FCA rules (including the “{{cobsprov|client’s best interest}}” rule – basically rule 1 of our [[conduct of business rules]]) impose this (at a minimum) as a conduct standard anyway. | *FCA rules (including the “{{cobsprov|client’s best interest}}” rule – basically rule 1 of our [[conduct of business rules]]) impose this (at a minimum) as a conduct standard anyway. | ||
*Both versions of the Industry standard ISDA {{tag|CSA}} impose it as standard | *Both versions of the Industry standard ISDA {{tag|CSA}} impose it as standard; | ||
*It’s a standing term of the [[Uniform Commercial Code]] (although you can contract out of it, though why you would is a hard question to answer); | |||
*Clients like it. It is psychologically valuable and a good selling point. | *Clients like it. It is psychologically valuable and a good selling point. | ||
*Recent, directly on-point case-law ({{casenote|Barclays|Unicredit}}) supports the (self-evident) proposition that in acting in a commercially reasonable manner one need only consider one’s own reasonable commercial interests, not one’s counterparty’s (how could we possibly know what those were?). Thus the burden of proof for a counterparty to overcome (how could it possibly know what our commercial interests are?) is therefore significant | *Recent, directly on-point case-law ({{casenote|Barclays|Unicredit}}) supports the (self-evident) proposition that in acting in a commercially reasonable manner one need only consider one’s own reasonable commercial interests, not one’s counterparty’s (how could we possibly know what those were?). Thus the burden of proof for a counterparty to overcome (how could it possibly know what our commercial interests are?) is therefore significant | ||