Open AccessRights, Duties and Obligations of Counter-Parties following Default under Derivative Contracts
Author(s) -
Sean F. Collins
Publication year - 2020
Publication title -
alberta law review
Language(s) - English
Resource type - Journals
eISSN - 1925-8356
pISSN - 0002-4821
DOI - 10.29173/alr487
Subject(s) - insolvency , notice , business , derivative (finance) , collateral , good faith , negotiation , damages , duty , restitution , law and economics , surety , law , economics , finance , political science
The article discusses the use of derivative contracts as a risk-management tool and the results of terminating such contracts, including: termination under conditions of insolvency and non-insolvency of a counter party; the use of collateral security to mitigate the risks of contractual obligations that might terminate prematurely; the duty to negotiate in good faith; notice requirements for termination of a derivative contract; and damages/penalties that arise when a contract is terminated prior to completion.