Accuracy of Specified Information - ISDA Provision: Difference between revisions

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Accuracy of Specified Information - ISDA Provision (view source)

Revision as of 16:35, 26 June 2018

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{{commonnegpoints}}
{{commonnegpoints}}
Opposing negotiators may try to crowbar in something like this, to satisfy their yen to make a difference and please their clients with their acumen and commercial fortitude:
Opposing negotiators may try to crowbar in something like this, to satisfy their yen to make a difference and please their clients with their acumen and commercial fortitude:
:''“or, in the case of financial information, a fair representation of the financial conditions of the relevant party, provided that the other party may rely on any such information when determining whether an Additional termination Event has occurred.”''
:''“or, in the case of financial information, a fair representation of the financial condition of the relevant party, provided that the other party may rely on any such information when determining whether an Additional termination Event has occurred.”''


You have to ask what exactly this achieves, and how it is any different from the standard wording. One pedant might insist on the conjunctive “[[and]]” rather than the disjunctive “[[or]]”. And is a “fair representation of a party’s financial standing” a different thing from  “true, accurate and complete in all material respects?”. Who knows? Who is asking? On what planet would real-life circumstances exist in which it would ever make a difference?
This is predicated on the following reasoning: “In publishing the audit, the auditor itself is not making any greater representation than that in its view the statements are a fair representation of the financial conditions. I didn't even write the audit. Why should I give any more severe representation than the expert? How do I even know?”
 
The riposte is this:
 
{{isdaprov|The {{isdaprov|Part 3}} information you must supply is “Party B’s annual [[audited financial statements]].” So the [[Representations - ISDA Provision|representation]] we are after is that what you have handed over ''is a fair, accurate and complete copy of those audited statements'', not that the statements themselves, as prepared by the auditor are fair, accurate and complete. To get that comfort, we have the auditor’s own representation of the company’s financial condition, and we don’t need yours.}}


{{Specified Information and Breach of Agreement}}
{{Specified Information and Breach of Agreement}}


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