Force Majeure Event - ISDA Provision: Difference between revisions

Jump to navigation Jump to search

Force Majeure Event - ISDA Provision (view source)

Revision as of 09:45, 31 December 2023

3,792 bytes removed ,  31 December 2023
no edit summary
No edit summary
 
(23 intermediate revisions by the same user not shown)
Line 1: Line 1:
{{ISDAnumberingdiscrepancy}}
{{newisdamanual|Force Majeure}}
 
===Section {{isdaprov|5(b)(ii)}} {{2002ma}}===
{{isdaquote|{{isdaprov|5(b)(ii)}} {{isdaprov|Force Majeure Event}}. After giving effect to any applicable provision, disruption fallback or remedy specified in, or <br>pursuant to, the relevant Confirmation or elsewhere in this {{isdaprov|Agreement}}, by reason of [[force majeure]] or act of state occurring <br>after a {{isdaprov|Transaction}} is entered into, on any day:― <br>
:(1) the {{isdaprov|Office}} through which such party (which will be the {{isdaprov|Affected Party}}) makes and receives payments or deliveries with <br>respect to such {{isdaprov|Transaction}} is prevented from performing any absolute or contingent obligation to make a payment or delivery <br>in respect of such Transaction, from receiving a payment or delivery in respect of such {{isdaprov|Transaction}} or from complying with <br>any other material provision of this {{isdaprov|Agreement}} relating to such {{isdaprov|Transaction}} (or would be so prevented if such payment, <br>delivery or compliance were required on that day), or it becomes impossible or impracticable for such {{isdaprov|Office}} so to perform, <br>receive or comply (or it would be impossible or impracticable for such {{isdaprov|Office}} so to perform, receive or comply if such <br>payment, delivery or compliance were required on that day); or <br>
:(2) such party or any {{isdaprov|Credit Support Provider}} of such party (which will be the {{isdaprov|Affected Party}}) is prevented from performing <br>any absolute or contingent obligation to make a payment or delivery which such party or {{isdaprov|Credit Support Provider}} has under <br>any {{isdaprov|Credit Support Document}} relating to such {{isdaprov|Transaction}}, from receiving a payment or delivery under such Credit Support <br>Document or from complying with any other material provision of such {{isdaprov|Credit Support Document}} (or would be so prevented if <br>such payment, delivery or compliance were required on that day), or it becomes impossible or impracticable for such party or <br>{{isdaprov|Credit Support Provider}} so to perform, receive or comply (or it would be impossible or impracticable for such party or <br>{{isdaprov|Credit Support Provider}} so to perform, receive or comply if such payment, delivery or compliance were required on that day), <br>
so long as the force majeure or act of state is beyond the control of such Office, such party or such Credit Support <br>Provider, as appropriate, and such {{isdaprov|Office}}, party or {{isdaprov|Credit Support Provider}} could not, after using all reasonable efforts <br>(which will not require such party or {{isdaprov|Credit Support Provider}} to incur a loss, other than immaterial, incidental expenses), <br>overcome such prevention, impossibility or impracticability;|5(b)(ii)|2002}}
 
===Section {{isdaprov|5(b)(ii)}} in the {{1992ma}}===
There is no equivalent to the {{isdaprov|Force Majeure Event}} in the {{1992ma}}. An {{isdaprov|Impossibility}} clause was frequently written into the schedule, which endeavoured to do the same thing.
 
===Incorporating Force Majeure into the {{1992ma}}===
One can incorporating {{isdaprov|Force Majeure}} into the {{1992ma}} as long as you carry the concept through to its logical conclusion i.e.:
*Include a {{isdaprov|Hierachy of Events}};
*Consider the impact re a deferral of {{isdaprov|Early Termination Amount}} etc.
The concept also impacts the basis of [[Close Out]] because the {{2002ma}} requires use of true mids for valuation i.e, not the mean of each party's view of the bid/offer where a {{isdaprov|Force Majeure Event}} (or {{isdaprov|Illegality}}) occurs, which is effectively what you get under the {{1992ma}} with a "Two {{isdaprov|Affected Parties}}" option.
 
{{isdaanatomy}}
Retrieved from "https://jollycontrarian.com/index.php?title=Special:MobileDiff/4802...81759"

Navigation menu