Template:M summ 1992 ISDA Force Majeure Event: Difference between revisions

===[[Force majeure]] in the {{1992ma}}===

There is no equivalent to the {{2002ma}}’s {{isdaprov|Force Majeure Event}} in the {{1992ma}}. You could, and many old-timers do, write an {{isda92prov|Impossibility}} clause into the {{isda92prov|Schedule}}, which endeavoured to do the same thing. Or you could incorporate the {{2002ma}}’s {{isdaprov|Force Majeure Event}} into the {{1992ma}} — as long as you carry the concept through to its logical conclusion i.e.:

*Include a “{{isdaprov|Hierarchy of Events}}” to be clear what happens where the same event is both a {{isda92prov|Event of Default}} ''and'' a {{isda92prov|Force Majeure Event}};  

*Consider the impact of a deferral on the {{isda92prov|Early Termination Amount}} etc.  

The concept also impacts the basis of [[close-out]] because the {{2002ma}} requires true [[mid]]s for valuation i.e, not simply the average of each party’s view of the [[Bid-offer spread|bid/offer]] where a {{isda92prov|Force Majeure Event}} (or {{isda92prov|Illegality}}) occurs, which is effectively what you get under the {{1992ma}} with a “Two {{isda92prov|Affected Parties}}” option.

 

The easiest way of achieving this is to sign up to the ISDA protocol on [http://www.isda.org/2012illegalityprot/docs/ISDA_Protocol_-_Adoption_of_2002_Illegality_FM_provisions_Final.pdf Illegality and Force Majeure].