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| In which the [[JC]] thinks he might have found a ''bona fide'' use for the awful legalism “[[and/or]]”. Crikey.
| | {{isda 5(c) summ|isdaprov}} |
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| What to do if the same thing counts as an {{isdaprov|Illegality}} ''[[and/or]]'' a {{isdaprov|Force Majeure Event}} ''[[and]]'' an {{isdaprov|Event of Default}} ''[[and/or]]'' a {{isdaprov|Termination Event}}.
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| Why do we need this? Remember, an {{isdaprov|Event of Default}} is an apocalyptic disaster scenario which blows your whole agreement up with extreme prejudice; a {{isdaprov|Termination Event}} is just “one of those things” which justifies termination, but may relate only to a single {{isdaprov|Transaction}}, and even if it affects the whole portfolio, it isn’t something one needs necessarily to hang one’s head about. (It’s hardly ''your'' fault if they go and change the law on you, is it?)
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| A {{isdaprov|Force Majeure Event}} is something that is so beyond one’s control or expectation that it shouldn’t count as an {{isdaprov|Event of Default}} or even a {{isdaprov|Termination Event}} ''at all'' — at least until you’ve had a chance to sort yourself out, fashion a canoe paddle with a Swiss Army knife, jury-rig an aerial and get reconnected to the world wide web.
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| ===Non-[[Repudiatory breach|repudiatory]] {{isdaprov|Breach of Agreement}}===
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| Note that the subordination of {{isdaprov|Events of Default}} to {{isdaprov|Illegality}} and {{isdaprov|Force Majeure}} in section {{isdaprov|5(c)(i)}} are specifically excludes a [[Repudiatory breach|repudiatory]] Breach of Agreement as contemplated under the newly introduced section 5(a)(ii)(2), and any {{isdaprov|Credit Support Default}} other than a direct, and non-[[Repudiatory breach|repudiatory]], default by the {{isdaprov|Credit Support Provider}}. Why? Well, firstly this is about unitary Events ofDefault which are ''directly caused by'' {{isdaprov|Illegality}} or {{isdaprov|Force Majeure}}, not simply ones which are coincidental with them, and secondly, if you have actually [[Repudiation|repudiated]] the contract — that is to say, point-blank ''refused'' to perform its clear terms — and, by lucky hap, your [[repudiation]] coincides with an {{isdaprov|Illegality}}, then your counterparty should not be obliged to give you the benefit of the doubt and have to close you out via the more genteel route of an {{isdaprov|Illegality}} {{isdaprov|Termination Event}}.
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| If you’ve thrown your toys out of the pram, expected to be spanked, that is to say.<ref>It ought to go without saying that the [[Jolly Contrarian]] does not condone corporal punishment to wanton boys, although it never did him any harm.</ref>
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Latest revision as of 15:45, 27 December 2023