Potential Event of Default - ISDA Provision

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2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual

Definition of Potential Event of Default in a NutshellTM
Use at your own risk, campers!

Potential Event of Default” means an event which, with the giving of notice or the passing of time, would be an Event of Default.
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Definition of Potential Event of Default in full

Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
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Related agreements and comparisons

Related Agreements
Click here for the text of Section Potential Event of Default in the 1992 ISDA
Comparisons
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Resources and navigation

Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA
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 Deliver5(a)(ii) Breach of Agreement5(a)(iii) Credit Support Default5(a)(iv) Misrepresentation5(a)(v) Default Under Specified Transaction5(a)(vi) Cross Default5(a)(vii) Bankruptcy5(a)(viii) Merger without Assumption
Termination Events: 5(b)(i) Illegality5(b)(ii) Force Majeure Event5(b)(iii) Tax Event5(b)(iv) Tax Event Upon Merger5(b)(v) Credit Event Upon Merger5(b)(vi) Additional Termination Event

Content and comparisons

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Summary

A Potential Event of Default is a Failure to Pay or Deliver, Breach of Agreement (or other Event of Default) with an unexpired grace period, or where the grace period has expired but the Non-defaulting Party hasn’t (yet) given a notice of default actually accelerating the default into an actual Event of Default.
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General discussion

Grace periods and notice requirements for each Event of Default

A JC cut-out-and-keepTM guide. Useful if you are fretting about Potential Event of Default. Don’t feel embarrassed: we all do, every now and then, when spring is upon us.

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See also

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References

  1. See for example Sections 5(a)(viii)(4) and (7).
  2. 30 days in the 1992 ISDA, 15 days in the 2002 ISDA.