Resolving derivatives disputes

Dispute resolution and derivatives

Derivatives can give rise to a range of disputes. In common with any scenario in which parties negotiate, enter into and perform (or fail to perform) a contract, claims may arise, for example:

1. •

   for negligent misstatement, deceit or breach of section 2 of the Misrepresentation Act 1967

2. •

   for breach of contract in relation to any failure by either party to comply with its obligations under the derivative contract

3. •

   other contract law-based claims alleging frustration, mistake, duress, undue influence, incapacity, non est factum, absence of offer and acceptance, absence of consideration, illegality or other generally available contractual causes of action

4. •

   parallel tort claims alleging duties in tort that are said to supplement a party’s duties under the derivative contract, as well as economic tort claims, and

5. •

   equitable claims such as claims seeking restitution, claims relating to agency, trusteeship or other forms of equitable rights or remedies

Some areas within this broad range of causes of action have commonly