Template:Isda Illegality summ: Difference between revisions

Template:Isda Illegality summ (view source)

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-'''{{isdaprov|Illegality}} vs. {{isdaprov|Force Majeure}} smackdown''': Like a {{isdaprov|Force Majeure Event}}, an {{isdaprov|Illegality}} may only be triggered after exhausting the fallbacks and remedies specified in the {{2002ma}}.
+If the rules change, that is beyond your control, so it can’t be helped and hence Illegality is a {{isdaprov|Termination Event}} not an {{isdaprov|Event of Default}}. The {{2002ma}} develops the language of the {{1992ma}} to cater for insomniacs and paranoiacs but does not really add a great deal of substance.
-'''Waiting period''': There is a {{isdaprov|Waiting Period}} before you can terminate for {{isdaprov|Illegality}} the {{2002ma}}. Note the effect of section {{isdaprov|6(b)(iv)}}(2) in the {{2002ma}} is to impose a {{isdaprov|Waiting Period}} of three {{isdaprov|Local Business Day}}s before one acquires the right to terminate on account of an {{isdaprov|Illegality}}. There is no such waiting period in the {{1992ma}}.
+An {{{{{1}}}|Illegality}} may only be triggered after exhausting the fallbacks and remedies specified in the {{isdama}}.
-'''{{isdaprov|Hierarchy of Events}}''': Under the {{2002ma}}, Section {{isdaprov|5(c)}} (''{{isdaprov|Hierarchy of Events}}'') intervenes to provide that (i) {{isdaprov|Illegality}} trumps {{isdaprov|Force Majeure}} and (ii) {{isdaprov|Illegality}} and {{isdaprov|Force Majeure}} both trump the {{isdaprov|Failure to Pay}} and {{isdaprov|Breach of Agreement}} {{isdaprov|Events of Default}}. Given that {{{{{1}}}|Illegality}} is no longer subject to the “two {{{{{1}}}|Affected Parties}}” delay on termination (as it was in the {{1992ma}}), this is significant.
+Note the effect of section {{isdaprov|6(b)(iv)}}(2) in the {{2002ma}} is to impose a {{isdaprov|Waiting Period}} of three {{isdaprov|Local Business Day}}s before one can terminate for {{isdaprov|Illegality}}. There is no such waiting period in the {{1992ma}}.
+The {{2002ma}} adds a {{isdaprov|Force Majeure}} termination event — {{isdaprov|Illegality}} is of course a sub-species of force majeure, so it is then obliged to artfully explain what happens when you have a {{isdaprov|Force Majeure}} that is ''also'' an {{isdaprov|Illegality}}. Section {{isdaprov|5(c)}} (''{{isdaprov|Hierarchy of Events}}'') deals with this, providing that (i) {{isdaprov|Illegality}} trumps {{isdaprov|Force Majeure}} and (ii) {{isdaprov|Illegality}} and {{isdaprov|Force Majeure}} both trump the {{isdaprov|Failure to Pay}} and {{isdaprov|Breach of Agreement}} {{isdaprov|Events of Default}}. Given that {{{{{1}}}|Illegality}} is no longer subject to the “two {{{{{1}}}|Affected Parties}}” delay on termination (as it was in the {{1992ma}}), this is significant.
+Since the {{1992ma}} is still in widespread use, especially in the New World, and Americans are not ''entirely'' blind to what goes on beyond their shores, they have seen the sense of the Force Majeure concept and often reverse engineer an equivalent Force Majeure provision in to their 1992s via the Schedule (I know, I know: why not just use the {{2002ma}}?) If yours is like that, then all this hierarchy chat may be useful to you.