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| ===Flawed assets===
| | {{isda 2(a) gen|isdaprov}} |
| Section 2(a)(iii): Of these provisions, the one that generates the most controversy (chiefly among academics and scholars, it must be said) is Section {{isdaprov|2(a)(iii)}}. It generates a lot less debate between [[negotiator]]s, precisely because its legal effect is nuanced, so its terms are more or less inviolate. Thus, should your [[counterparty]] take a pen to Section {{isdaprov|2(a)(iii)}}, a clinching argument ''against'' that inclination is “''just don’t go there, girlfriend''”.
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| ===Payments and deliveries===
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| In a rare case of leaving things to practitioners’ common sense, {{icds}} deigned not to say what it meant by “{{isdaprov|payment}}” or “{{isdaprov|delivery}}”.
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| '''Payments''' are straightforward enough, we suppose — especially since they are stipulated to be made in “[[freely transferable funds]] and in the manner customary for payments in the required currency”: beyond that, money being money, you either pay or you don’t: there are not too many shades of meaning left for legal eagles to snuggle into.
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| '''Deliveries''', though, open up more scope for confecting [[doubt]]s one can then set about [[For the avoidance of doubt|avoiding]]. what does it mean to deliver? What of assets in which another actor might have some claim, title or colour of interest? In financing documents you might expect at least a [[representation]] that “the delivering party beneficially owns and has absolute rights to deliver any required assets free from any competing interests other than customary liens and those arising under security documents”.
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| What better cue could there be for opposing combatants leap into their trenches, and thrash out this kind of language?
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| Less patient types — like yours truly — might wish to read all of that into the still, small voice of calm of the word “deliver” in the first place. What else could it realistically mean, but to deliver outright, and free of competing claims? It is bound up with implications about ''what'' you are delivering, and ''whose'' the thing is that you are delivering. It would be absurd to suppose one could discharge a physical delivery obligation under a swap by “delivering” an item to which one had no title at all: it is surely implicit in the commercial rationale that one is transferring, outright, the value implicit in an asset and not just the formal husk of the asset itself, on terms that it may be whisked away at any moment. One is surrendering the implicit expense of the asset (in return for whatever your counterparty surrenders to you). As the bailiffs take leave of your counterparty with the asset you gave it strapped to their wagon, it would hardly do to say, “oh, well, I did deliver you that asset: it never said anywhere I had to have any proprietary interest in it, or that I was meant to be transferring any legal interest in it to you. It is all about my the act of delivery, I handed something to you, and that is that.”
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