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No event of default or potential event of default: Difference between revisions
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No event of default or potential event of default (view source)
Revision as of 12:09, 5 January 2021
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===“...or [[potential event of default]]”=== | ===“...or [[potential event of default]]”=== | ||
Adding potential events of default is onerous, especially if it is a continuous representation, as it deprives the representor of [[grace period]]s it has carefully negotiated into its other payment obligations. | Adding [[potential event of default|''potential'' events of default]] is onerous — or would be if it weren’t simply preposterous, per the above — especially if it is a continuous representation, as it deprives the representor of [[grace period]]s it has carefully negotiated into its other payment obligations. Besides the sorts of obligations that have grace periods — usually payment and delivery obligations, are ones which you don’t need the other guy to own up to you about, because you can see for yourself that you haven’t been paid. Remember the point of representations is to attest to things you could not reasonably find out by yourself. | ||
===“... or would occur as a result of entering into this agreement”=== | ===“... or would occur as a result of entering into this agreement”=== | ||
A curious confection, you might think: ''what sort of [[event of default]] could a fellow trigger merely by entering into an {{isdama}} with me?'' Well, remember the [[ISDA]]’s lineage. It was crafted, before the alliance of men and elves, by the [[Children of the Forest]]. They were a species of pre-derivative, banking people. It is possible they had in mind the sort of [[restrictive covenant]]s a banker might demand of a borrower with a look of softness about its credit standing: perhaps a promise not to create material [[indebtedness]] to another lender, though in these enlightened times that would be a great constriction indeed on a fledgling enterprise chasing the world of opportunity that lies beyond its door. | A curious confection, you might think: ''what sort of [[event of default]] could a fellow trigger merely by entering into an {{isdama}} with me?'' Well, remember the [[ISDA]]’s lineage. It was crafted, before the alliance of men and elves, by the [[Children of the Forest]]. They were a species of pre-derivative, banking people. It is possible they had in mind the sort of [[restrictive covenant]]s a banker might demand of a borrower with a look of softness about its credit standing: perhaps a promise not to create material [[indebtedness]] to another lender, though in these enlightened times that would be a great constriction indeed on a fledgling enterprise chasing the world of opportunity that lies beyond its door. | ||