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Commercially reasonable manner (view source)
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{{ | In good faith and in a commercially reasonable manner: | ||
*'''cuts the crap''': potentially unlocks a lot of negotiations and takes much of the line-by-line lawyering out of the others. | |||
*The old “it presents heightened litigation risk” canard is bogus: | |||
**The oft-cited “litigation risk” of agreeing to act reasonably is an extremely remote one. | |||
**It hardly adversely affects litigation risk in any case: A dissatisfied client will take action, and there are plenty of legal devices it can use to imply or insert a requirement for reasonableness in any case. | |||
Note also: | |||
*FCA rules (including the “{{cobsprov|client’s best interest}}” rule – basically rule 1 of our [[conduct of business rules]]) impose this (at a minimum) as a conduct standard anyway. | |||
*Both versions of the Industry standard ISDA {{tag|CSA}} impose it as standard | |||
*Clients like it. It is psychologically valuable and a good selling point. | |||
*Recent, directly on-point case-law ({{casenote|Barclays|Unicredit}}) supports the (self-evident) proposition that in acting in a commercially reasonable manner one need only consider one’s own reasonable commercial interests, not one’s counterparty’s (how could we possibly know what those were?). Thus the burden of proof for a counterparty to overcome (how could it possibly know what our commercial interests are?) is therefore significant | |||
*We do, in fact, always and only act in a commercially reasonable manner. If we did not, the franchise damage would be as material as any perceived legal risk. | |||
*Having a commercially reasonable standard expressly stated in the documents to my mind encourages the correct behaviour of business and risk management teams, further minimising franchise and litigation risk. | |||
In what follows I assume you're a [[good egg]]; the sort of person who means what he says, says what he means, and gives a legal covenant only in circumstances where he has an honest intention of carrying it out. If you're not of that fibre, you have no place here. | In what follows I assume you're a [[good egg]]; the sort of person who means what he says, says what he means, and gives a legal covenant only in circumstances where he has an honest intention of carrying it out. If you're not of that fibre, you have no place here. | ||