Under common law, the essential elements of innovation are: (1) a valid prior obligation; (2) an agreement between the parties to a new contract; (3) the removal of previous commitments; and (4) a new valid contract. To satisfy the second and third elements, all parties must have “clearly expressed their intention to replace or replace an old agreement.” 3 The key to innovation analysis is therefore the intention of the parties. In the In Re Fair Finance Company, the amended and amended loan agreement (the “2004 agreement”) expressly provided that commitments under that agreement would be guaranteed by a security interest for the same guarantees guaranteeing the original credit contract (the “2002 agreement”), and that the 2004 agreement set out “the parties` desire to amend and reaffirm the 2002 agreement”4,4, noted that the following provisions of the 2004 agreement support the conclusion that the parties to the 2004 agreement are a renewal of the 2002 agreement: many changes can be made to the terms of a commercial financing mechanism over its duration. They are sometimes contained in a brief change document that covers only the various changes. There may be a number of cases, and for more complex and longer transactions, it is customary for the original agreement to be “modified and revised” with its amendments – in other words, consolidated and contained in a single document. It`s as much for the lightness of reading as anything else. Recently, the U.S. Court of Auditors for circuit of Six in Bash v. Textron Financial Corporation (In re Fair Finance Company)1 overturned a decision of the District Court for the Northern District of Ohio that an amended and revised loan agreement was not an innovation in the original loan agreement. Thus, in the generalized cancellation of the rejection of a proceeding in question resulting from Chapter 7 bankruptcy proceedings, the Landgericht found that the amended and amended loan agreement was in fact a reissue of the original loan contract (or at least is not clear). If the amended and revised loan agreement were indeed a new one, the security interest granted on the basis of the original loan agreement would have been terminated on the date the parties entered into the amended and amended loan agreement2. The decision will surprise many financiers and lawyers, who would generally view an “amendment and recovery” as a continuation of the existing facility agreement, rather than as a new agreement that terminated the old one.
The distinction can have radically different consequences, as has been the case here. In the decision of the Court of Appeal of Western Australia in Australia and New Zealand Banking Group Limited/. Manasseh (March 10, 2016) was the central theme of the legal nature and the effect of an amendment and reassessment. In the case, this was a request from the Bank as part of a guarantee granted at the time of the initial grant of the facility. The result was a victory for the guarantor, who successfully argued that the guarantee granted at the beginning of the facility would not be extended to amended investment agreements that were “modified and amended” at a later date. If a lawyer wishes to amend the terms of an agreement and the amendments are significant and involve many provisions of the agreement, counsel will often develop an amended and revised agreement to make these changes. A single modified and revised agreement is often easier to read than the original agreement and a separate amendment (or a number of separate amendments). For financing transactions, parties often use modified and revised credit contracts.