The Framework Agreement also helps to reduce litigation by providing significant resources that define its terms and declare the intent of the treaty, thus preventing the commencement of disputes and providing a neutral resource for the interpretation of standard contractual terms. Finally, the framework contract significantly helps the parties to manage risks and loans. The ISDA Framework Agreement determines whether the laws of the United Kingdom or the State of New York apply. It also sets out the conditions for the valuation, closing and clearing of all covered transactions in the event of a termination event. Over-the-counter (OTC) or over-the-counter transactions involve inherent risks for both parties that can make negotiating an agreement difficult and time-consuming. .