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Right to Terminate - ISDA Provision: Difference between revisions
Right to Terminate - ISDA Provision (view source)
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What a beast. If you track it through in {{tag|nutshell}} terms, it isn’t as bad as it first seems, but you have the derivative lawyer’s gift for over-complication, and the ISDA drafter’s yen for dismal drafting, to thank for this being the trial it is. | What a beast. If you track it through in {{tag|nutshell}} terms, it isn’t as bad as it first seems, but you have the derivative lawyer’s gift for over-complication, and the ISDA drafter’s yen for dismal drafting, to thank for this being the trial it is. | ||
To make it easier, we’ve invented some concepts: | To make it easier, we’ve invented some concepts and taken a few liberties: | ||
*“{{isdaprov|Unaffected Party}}” and “{{isdaprov|Unaffected Transaction}}” — saves you all that mucking around saying “the party who is not the {{isdaprov|Affected Party}}” and *“{{isdaprov|Transaction}}s other than those that are, or are deemed, to be {{isdaprov|Affected Transaction}}s” and so on) | *“{{isdaprov|Unaffected Party}}” and “{{isdaprov|Unaffected Transaction}}” — saves you all that mucking around saying “the party who is not the {{isdaprov|Affected Party}}” and *“{{isdaprov|Transaction}}s other than those that are, or are deemed, to be {{isdaprov|Affected Transaction}}s” and so on) | ||
*{{isdaprov|Termination Event Notice}} as an elegant and self-explanatory alternative to "after an {{isdaprov|Affected Party}} gives notice under Section {{isdaprov|6(b)(i)}}” | *{{isdaprov|Termination Event Notice}} as an elegant and self-explanatory alternative to "after an {{isdaprov|Affected Party}} gives notice under Section {{isdaprov|6(b)(i)}}” | ||
* | *We take it as logically true that you can’t give 20 days’ notice of something which you then say will happen in fewer than 20 days. Therefore, there is no need for all this “designate a day not earlier than the day such notice is effective” nonsense. | ||
So with that all out the way, here is how it works. Keep in mind that, unlike {{isdaprov|Events of Default}}, {{isdaprov|Termination Event}}s can arise through no fault of the {{isdaprov|Affected Party}} and are not always apocalyptic in consequence. Depending what they are, they may be cured, worked around, or dented Transactions may be surgically trimmed out, allowing the remainder of the Agreement, and the Unaffected Transactions, to carry on as normal. So here goes: | |||
Keep in mind that, unlike {{isdaprov|Events of Default}}, {{isdaprov|Termination Event}}s can arise through no fault of the {{isdaprov|Affected Party}} and are not always apocalyptic in consequence. Depending what they are, they may be cured, worked around, or dented Transactions may be surgically trimmed out, allowing the remainder of the Agreement, and the Unaffected Transactions, to carry on as normal. So here goes: | |||
====Divide up the types of {{isdaprov|Termination Event}}==== | ====Divide up the types of {{isdaprov|Termination Event}}==== | ||