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Template:Transaction injunctions: Difference between revisions
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There is at least a colour of an argument that the rights protected by a [[confidentiality]] undertaking are ineffable enough to be beyond the remedial powers of [[contractual damages]]. That argument is harder to make out for amounts due under a market transaction — a [[swap]], [[option]], [[Forward contract|forward]], [[stock loan]] or [[repo]]. That won’t stop fastidious [[legal eagle]]s trying. Even ones from reputable organisations. | There is at least a colour of an argument that the rights protected by a [[confidentiality]] undertaking are ineffable enough to be beyond the remedial powers of [[contractual damages]]. That argument is harder to make out for amounts due under a market transaction — a [[swap]], [[option]], [[Forward contract|forward]], [[stock loan]] or [[repo]]. That won’t stop fastidious [[legal eagle]]s trying. Even ones from reputable organisations. | ||
Here is why you must resist this foolish talk. | Here is why you must resist this [[Adequacy of damages|foolish talk]]. | ||
When we trade [[financial product]]s, we check our emotional lives at the door. The moment we step onto that trading floor our personal sensibilities are not at stake; we leave our peace-time selves as spouses, parents, Rotarians, and members of the church choir in the cloak-room. We become, in the eyes of the market, self-interested merchants in the most mercenary sense {{author|Adam Smith}} had in mind; profit is our only motive, and the sole propeller of the invisible guiding hand. We put aside our adorable proclivities and idiosyncrasies and become ''[[Homo economicus|homo economici]]''. | When we trade [[financial product]]s, we check our emotional lives at the door. The moment we step onto that trading floor our personal sensibilities are not at stake; we leave our peace-time selves as spouses, parents, Rotarians, and members of the church choir in the cloak-room. We become, in the eyes of the market, self-interested merchants in the most mercenary sense {{author|Adam Smith}} had in mind; profit is our only motive, and the sole propeller of the invisible guiding hand. We put aside our adorable proclivities and idiosyncrasies and become ''[[Homo economicus|homo economici]]''. | ||
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Should we cause or experience commercial upset when in this fugue state, we assess it along a single axis: pounds, shillings and pence. | Should we cause or experience commercial upset when in this fugue state, we assess it along a single axis: pounds, shillings and pence. | ||
Take the failure to meet a re-delivery obligation under a [[stock loan]]. The security in question has an observable price, by which you can track your loss in not having it delivered on time. You may incur financing costs while you wait; you may be bought in by your own counterparties further down the line: all these are reasonably foreseeable consequences of non-performance. so foreseeable, in fact, that they are enshrined in the very terms of the {{gmsla}}. There is no need to go to the court for damages, let alone equitable relief: you may buy in your self, and pass the costs to your counterparty. The contract says so in black and white. but more to the point, a counterparty who has failed — assuming it has not simply forgotten — will have failed for a simple reason. It hasn’t got the security in question, and it can’t locate it in the market. These things happen from time to time. ''So what good is an [[ | Take the failure to meet a re-delivery obligation under a [[stock loan]]. The security in question has an observable price, by which you can track your loss in not having it delivered on time. You may incur financing costs while you wait; you may be bought in by your own counterparties further down the line: all these are reasonably foreseeable consequences of non-performance. so foreseeable, in fact, that they are enshrined in the very terms of the {{gmsla}}. There is no need to go to the court for damages, let alone equitable relief: you may buy in your self, and pass the costs to your counterparty. The contract says so in black and white. but more to the point, a counterparty who has failed — assuming it has not simply forgotten — will have failed for a simple reason. It hasn’t got the security in question, and it can’t locate it in the market. These things happen from time to time. ''So what good is an [[injunction]] compelling a poor fellow to [[Specific performance|perform an obligation]] to deliver a security she plainly does not have?'' | ||
Not much, in this fellow’s humble opinion. | |||