Condition End Date - ISDA Provision
2002 ISDA Master Agreement
Section 6(g) in a Nutshell™ Use at your own risk, campers!
Full text of Section 6(g)
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Section 2(e), dealing with default interest, was removed in the 2002 ISDA, and replaced with a spikier, more fulsome Section 9(h) (Interest and Compensation).
A new and different Section 2(e) for the 2002 ISDA was almost revived after the global financial crisis as a tool for imposing a “use it or lose it” trigger on Section 2(a)(iii), but the moment passed. See Condition End Date for more information.
Summary
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.