The Single Agreement Concept in International Framework Contracts for Cross-Border Derivatives and Other Financial Transactions

RUDN Journal of Law. 2025. Vol. 29. No. 2. P. 438–455.

Aleksei P. Klementyev

Master agreements produced by trade associations – standardized framework contracts used in international markets – have largely replaced tailor-made documentation in the contemporary financial world. These agreements provide a reliable foundation for structuring obligations across a broad range of financial instruments, including forwards, options, swaps, repurchase agreements (repos), and securities lending transactions. Despite being developed in diverse regions, standard contracts for cross border financial products exhibit several common features. A key feature is the “single agreement” concept, and its corresponding contractual clause. The article provides an overview of “single agreement” clauses found in international master agreements and examines two critical implications of this fundamental aspect of standard documentation. First, it explores the enforceability of close-out netting, a mechanism vital for managing counterparty risk in the event of default. Second, it discusses the application of a unified governing law to all elements of the standard documentation, which might otherwise be subject to various laws determined by conflict-of-laws rules. Beyond these legal applications, the single agreement also serves a technical function by uniting numerous schedules, annexes, confirmations, protocols, and other components of standard documentation withing a single legal framework.

Keywords: банкротство, ликвидационный неттинг, derivatives, деривативы, bankruptcy, master agreement, генеральное соглашение, close-out netting, сделки репо, financial transactions, финансовые сделки, single agreement, единый договор, repurchase agreements, securities lending, займы ценных бумаг