The opening paragraph of the ISDA Master Agreement

The ISDA Master Agreement is in the form of a "master" agreement. When parties enter into an ISDA Master Agreement they create an agreement evidencing the general terms on which every Transaction referable to that ISDA Master Agreement will be entered into. A participant in the financial markets must enter into a separate ISDA Master Agreement with each other participant with whom it proposes to enter into Transactions.

Whenever the parties agree to enter into a Transaction, they evidence that agreement by a Confirmation. The Confirmation sets out the commercial terms of the Transaction. The ISDA Master Agreement expressly provides that it and all Confirmations referable to it constitute a single agreement.

It is most important that Confirmations are properly completed and, when relevant, incorporate the appropriate ISDA definitions by reference. If there is an inconsistency between a Confirmation and an ISDA Master Agreement, then the terms of the Confirmation prevail. A guide for completing Confirmations for each type of Transaction covered in the Guide is set out in that part of the Guide relating to that type of Transaction.

Last Update Date 28 Jun 2011