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| =={{1992ma}}==
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| The 1992 ISDA contains no provision specifically allowing a right of set off. There is a definition of Set-off, however:
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| {{isdaquote|{{clause|ISDA|Master Agreement|1992|Set-off Definition}}|Set-off Definition|1992}}
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| =={{2002ma}}==
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| {{isdaquote|{{clause|ISDA|Master Agreement|2002|6(f)}}|6(f)|1992}}
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| ==Commentary==
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| {{nuts|ISDA|Set-off}}
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| ==={{1992ma}}===
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| ISDA published a provision in the [[Users Guide]] but several bespoke versions of a set-off provision developed and were used in the market. These often provided for the inclusion of '''{{isdaprov|Affiliate}}s''' in relation to the {{isdaprov|Non-defaulting Party}} or {{isdaprov|Non-affected Party}}.
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| ==={{2002ma}}===
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| The 2002 ISDA contains a standard {{isdaprov|Set-off}} provision which refers to a “Payer” and “Payee”.
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| *'''Affiliates''': Either the "Payer" or the "Payee" could be the non-{{isdaprov|Defaulting Party}} or the non-{{isdaprov|Affected Party}} and so to include {{isdaprov|Affiliates}} into the 2002 Definition becomes problematic and cumbersome. Generally the market practice when using a 2002 schedule is therefore:
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| **'''Where Affiliates are required''': to use bespoke wording;
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| **'''Where Affiliates are not required''': and then fallback to the 2002 standard wording above.
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| *'''Scope''': The 2002 language provides for set-off following an {{isdaprov|Event of Default}}, {{isdaprov|CEUM}}, or any other {{isdaprov|Termination Event}} where there is one {{isdaprov|Affected Party}} and '''''all''''' outstanding transactions are {{isdaprov|Affected Transaction}}s.The {{Bank}} standard wording provides for set-off where there is an {{isdaprov|Event of Default}}, {{isdaprov|CEUM}}, {{isdaprov|Illegality}} or {{isdaprov|ATE}}. There is no specific reference to all {{isdaprov|Transaction}}s being {{isdaprov|Affected Transaction}}s but this is implied in any Set-off provision by its nature:
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| **If only some transactions are Affected Transactions and so only a portion of outstanding transactions are being terminated then there is an on-going relationship and unilateral set-off is not appropriate in such circumstances.
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| **i.e., if you ''weren't'' terminating all {{isdaprov|Transaction}}s, it would be drastic and counterproductive to a relationship to try to use a set-off clause!
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| *As such, the standard [[ISDA]] provision and the {{Bank}} provision are very similar in scope - the {{isdaprov|Tax Event}} and {{isdaprov|Tax Event Upon Merger}} provisions (those not caught by your wording) are more likely to only affect certain transactions and not all Transactions and therefore set-off is not likely to be relevant in such instances.
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| *'''Force Majeure''': The [[1992 ISDA Master]] contains no {{isdaprov|Force Majeure}} provision. Commercially, it is not likely that an [[ISDA]] would be closed-out as a result of a {{isdaprov|Termination Event}} as these are generally viewed as non-fault and set-off would generally not be relevant.
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| *'''{{isdaprov|Illegality}}''' does allow either party to terminate but this is limited to all {{isdaprov|Affected Transaction}}s which may not result in a [[close-out]] of the entire [[ISDA]]. In fact, the definition used of Affected Transactions makes it clear that in the cases of Illegality, Tax Event Upon Merger or Tax Event then it will only be transactions affected by the Termination Event that are closed-out. In relation to ATEs and CEUM this will be all Transactions and so set-off is relevant.
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| {{isdaanatomy}}
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