Entire Agreement - ISDA Provision
2002 ISDA Master Agreement
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9(a) in all its glory
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A lengthy disclaimer of any pre-contractual representations — presumably, not counting the ones patiently documented in Section 3 — is appended in the 2002 ISDA. You get the sense someone got burned in the ’90s, don’t you. Language that wounded has the air of wistful regret about it.
What you see is what you get, folks: if it ain’t written down in the ISDA Master Agreement, it don’t count, so no sneaky oral representations. But, anus matronae parvae malas leges faciunt, as we Latin freaks say: good luck in enforcing that if your counterparty is a little old lady.
Note also that liability for a fraudulent warranty or misrepresentation won’t be excluded. So if your oral representation or warranty is a bare-faced lie, the innocent party can maybe still rely on it in entering the agreement, even if it isn’t written down, though good luck parsing the universe of possible scenarios to figure out when that qualification might bite.
Smart-arse point: A warranty is a contractual assurance, made as part of a concluded contract, and cannot, logically, be relied on by the other party when entering into the contract. An assurance on which one relies when deciding to enter into a contract is a representation.
The entire agreement clause is legal boilerplate to nix any unwanted application of the parol evidence rule — to make sure one only cares for the four corners of the written agreement, and no extra-documentational squirrelling is allowed. Which might be a problem because the time-honoured understanding between all right-thinking derivatives trading folk is that the oral agreement, between the traders is the binding legal agreement, and not the subsequent confirmation, hammered out between middle office and operations folk after the trade is done. Hasten to Section 9(e)(ii) — the Confirmation is only evidence of the binding agreement. Could that be it?
- The JC’s famous Nutshell™ summary of this clause
- Entire agreement? An ISDA Master Agreement? Oh, come on, ISDA’s crack drafting squad™, you are having a laugh.
- On entire agreements, as a class generally: how they work
- Are you feeling lucky? An entire agreement entrusts your whole commercial arrangement to your lawyers. Are you sure that’s what you want?
- Does an entire agreement clause cut across the court’s power to imply terms to deliver business efficacy