Notices - ISDA Provision

2002 ISDA Master Agreement A Jolly Contrarian owner’s manual™ 12 in a Nutshell™ The JC’s Nutshell™ summaries are moving to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get them here. Sign up at Substack. 12 in all its glory 12. Notices 12(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner described below (except that a notice or other communication under Section 5 or 6 may not be given by electronic messaging system or e-mail) to the address or number or in accordance with the electronic messaging system or e-mail details provided (see the Schedule) and will be deemed effective as indicated:― (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient’s answerback is received; (iii) if sent by facsimile transmission, on the date it is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date it is delivered or its delivery is attempted; (v) if sent by electronic messaging system, on the date it is received; or (vi) if sent by e-mail, on the date it is delivered, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication will be deemed given and effective on the first following day that is a Local Business Day. 12(b) Change of Details. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system or e-mail details at which notices or other communications are to be given to it. edit Related agreements and comparisons Click here for the text of Section 12 in the 1992 ISDA Click to compare this section in the 1992 ISDA and 2002 ISDA. Resources and Navigation This provision in the 1992 Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project Navigation Preamble | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 Events of Default: 5(a)(i) Failure to Pay or Deliver • 5(a)(ii) Breach of Agreement • 5(a)(iii) Credit Support Default • 5(a)(iv) Misrepresentation • 5(a)(v) Default Under Specified Transaction • 5(a)(vi) Cross Default • 5(a)(vii) Bankruptcy • 5(a)(viii) Merger without Assumption • Termination Events: 5(b)(i) Illegality • 5(b)(ii) Force Majeure Event • 5(b)(iii) Tax Event • 5(b)(iv) Tax Event Upon Merger • 5(b)(v) Credit Event Upon Merger • 5(b)(vi) Additional Termination Event Index: Click ᐅ to expand: 2002 ISDA - Premium 1992 ISDA - Premium Premium version of this page

Overview

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The major change between the versions of Section 12 (Notices) was the 2002 ISDA’s inclusion of e-mail as a means of communication in addition to the 1992 ISDA’s electronic messaging system. Also, fax and electronic messaging system are not permitted means of serving close-out communications (i.e., under Sections 5 and 6) under the 1992 ISDA, but fax is permitted under the 2002 ISDA, whereas electronic messaging system and email are not. Got all that?

Summary

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Who would have thought a Notices provision would be so controversial? Especially the question, “what is an electronic messaging system”?

No-one, it is humbly submitted, until Andrews, J. of the Chancery Division, was invited to opine on Greenclose v National Westminster Bank plc, the kind of “little old lady” case that makes bad law. The learned judge does nothing to dispel the assumption that lawyers are technological Luddites who would apply Tip-Ex to their VDUs if they didn’t have someone to do their typing for them (and if they knew what a VDU was).

For there it was held that email is not an “electronic messaging system” and, as such, was an invalid means for serving a close-out notice under the 1992 ISDA, which doesn’t mention email. Read in depth about that case here.

And that was before the entire, interconnected world decided, as an orchestrated whole, to cease the conduct of the business as a physical idea for an indefinite period in early 2020. Suddenly, a widely-used and, it was assumed, well-tested notices regime started to look like it might not work.

Oh, and another thing: who seriously has a telex in this day and age?

Premium content

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• The JC’s famous Nutshell™ summary of this clause
• May deliver? or must deliver? Do I have an alternative? The curious case of Greenclose.
• Close-out notices are special
• And “deliver” means what exactly? A ramble through the standard reference dictionaries of our time, legal and otherwise.
• “Email” and “electronic messaging system”. The same, right? Right?? GUYS!?
• The coronavirus edition: closeout in a time of global mass-hysteria and what it all means if you aren’t allowed out

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See also

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• Greenclose v National Westminster Bank plc
• Electronic messaging system