Will the Flip Clause Enter the Canon?
Contract innovation is rare in sovereign debt markets, so we are interested whenever someone adds a new clause to the existing set of canonical forms. A number of innovations have appeared in 2025, one of which is the "flip clause." The clause allows investors to opt out of the governing law and enforcement jurisdiction initially chosen in the debt instrument. We have some questions about the clause and doubt that in its current form it will gain widespread acceptance. Right now, it seems more symbol than substance — a way to metaphorically flip off the New York legislature.
Producer: Leanna Doty
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Will the Flip Clause Enter the Canon?
Contract innovation is rare in sovereign debt markets, so we are interested whenever someone adds a new clause to the existing set of canonical forms. A number of innovations have appeared in 2025, one of which is the "flip clause." The clause allows investors to opt out of the governing law and enforcement jurisdiction initially chosen in the debt instrument. We have some questions about the clause and doubt that in its current form it will gain widespread acceptance. Right now, it seems more symbol than substance — a way to metaphorically flip off the New York legislature.
Producer: Leanna Doty
Ep 149 - Is Sri Lanka’s Loss Reinstatement Provision a Penalty?
Clauses & Controversies
44 minutes 13 seconds
11 months ago
Ep 149 - Is Sri Lanka’s Loss Reinstatement Provision a Penalty?
Is Sri Lanka’s Loss Reinstatement Provision a Penalty?
Two of our favorite things to talk about are innovative contract clauses and ancient illogical contract doctrines that unexpectedly bite in the ass. A few weeks ago, we walked through the Loss Reinstatement provisions for Ghana and Zambia. We asked the question of whether those provisions might run afoul of the antiquated and bizarre (to us) anti-penalty doctrines under English and New York law. English law having recently become more permissive with regards to permitting penalty type clauses – if they have a legitimate business purpose -- we speculated about whether the Zambia/Ghana clauses might pass muster. Maybe. But Sri Lanka’s version of the clauses is under New York law. And New York law on this matter is still stuck in the dark ages, best we can tell. So, does the Loss Reinstatement provision for Sri Lanka run afoul of the penalty doctrine?
Producer: Leanna Doty
Clauses & Controversies
Will the Flip Clause Enter the Canon?
Contract innovation is rare in sovereign debt markets, so we are interested whenever someone adds a new clause to the existing set of canonical forms. A number of innovations have appeared in 2025, one of which is the "flip clause." The clause allows investors to opt out of the governing law and enforcement jurisdiction initially chosen in the debt instrument. We have some questions about the clause and doubt that in its current form it will gain widespread acceptance. Right now, it seems more symbol than substance — a way to metaphorically flip off the New York legislature.
Producer: Leanna Doty
