Force Majeure Event - ISDA Provision: Difference between revisions

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Force Majeure Event - ISDA Provision (view source)

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{{ISDAnumberingdiscrepancy}}
{{newisdamanual|Force Majeure}}
{{isdasnap|5(b)(ii)}}
====Commentary====
 
====See Also====
 
{{isdaanatomy}}
 
 
Note that, while the {{1992ma}} does not contain the concept of Force Majeure, there is an [[ISDA Illegality/Force Majeure Protocol]] (see [http://www.isda.org/2012illegalityprot/docs/ISDA_Protocol_-_Adoption_of_2002_Illegality_FM_provisions_Final.pdf here]) which can be signed to adopt/incorporate the relevant parts:
 
 
===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. Note a few caveats with regard to Force Majeure Events:
*'''{{isdaprov|Hierarchy of Events}}''': {{ISDA Hierarchy of Events}}
*'''{{isdaprov|Deferral of Payments and Deliveries During Waiting Period}}''':  {{ISDA Deferral of Payments and Deliveries}}
==={{isdaprov|Waiting Period}}===
{{ISDA Waiting Period}}
 
===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}}
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