Defaulting Party - ISDA Provision

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2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual™

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Section Defaulting Party in a Nutshell

Use at your own risk, campers!
Defaulting Party” is defined in Section 6(a).

Full text of Section Defaulting Party

Defaulting Party” has the meaning specified in Section 6(a).

Related agreements and comparisons

Related Agreements
Click here for the text of Section Defaulting Party in the 1992 ISDA
Template:Isdadiff Defaulting Party

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Template:M comp disc 2002 ISDA Defaulting Party



The key thing to notice here is that — in an uncharacteristically rather neat, understated bit of drafting — Defaulting Party encapsulates a party who has itself defaulted, or whose Credit Support Provider or Specified Entity has committed an act which amounts to an Event of Default for that counterparty to this ISDA Master Agreement. I know, I know, this doesn’t seem that big of a deal: this sort of thing that should be plain, obvious and go without saying — but it saves you a job when, in your peregrinations round the party’s Confirmation, you come to talk of pending Events of Default and Termination Events agaisnt that party.

Instead of saying, laboriously, i“f there is an Event of Default or Termination Event with respect to a party or its Credit Support Providers or Specified Entities, as the case may be” you can speak of a Defaulting Party or an Affected Party.

Of course, it would be nice if there was a catch all for a party who has committed an Event of Default or suffered a Termination Event, so you didn’t need to go “Defaulting Party or Affected Party, as the case may be” — cheekily we suggest “Innocent Party” and “Implicated Party” (“Guilty Party”, though fun, isn’t quite right, seeing as Termination Events aren’t meant to impute any kind of culpability).


See also

Template:M sa 2002 ISDA Defaulting Party