Template:Isda Defaulting Party summ

The key thing to notice here is that — in an uncharacteristically rather neat, understated bit of drafting — Defaulting Party encapsulates a party who has itself defaulted, or whose {{{{{1}}}|Credit Support Provider}} or {{{{{1}}}|Specified Entity}} has committed an act which amounts to an {{{{{1}}}|Event of Default}} for that counterparty to this ISDA Master Agreement. I know, I know, this doesn’t seem that big of a deal: this sort of thing that should be plain, obvious and go without saying — but it saves you a job when, in your peregrinations round the party’s {{{{{1}}}|Confirmation}}, you come to talk of pending {{{{{1}}}|Events of Default}} and {{{{{1}}}|Termination Event}}s against that party.

Instead of saying, laboriously, “if there is an {{{{{1}}}|Event of Default}} or {{{{{1}}}|Termination Event}} with respect to a party or its {{{{{1}}}|Credit Support Provider}}s or {{{{{1}}}|Specified Entities}}, as the case may be” you can speak of a {{{{{1}}}|Defaulting Party}} or an {{{{{1}}}|Affected Party}}.

Of course, it would be nice if there was a catch-all for a party who has committed an {{{{{1}}}|Event of Default}} or suffered a {{{{{1}}}|Termination Event}}, so you didn’t need to go “{{{{{1}}}|Defaulting Party}} or {{{{{1}}}|Affected Party}}, as the case may be” — cheekily we suggest “{{{{{1}}}|Innocent Party}}” and “{{{{{1}}}|Implicated Party}}” (“Guilty Party”, though fun, isn’t quite right, seeing as {{{{{1}}}|Termination Event}}s aren’t meant to impute any kind of culpability).