Businesses are encountering situations that they never
imagined, planned for or anticipated with this pandemic. There may be a time
when you have issues delivering on a contract or having a vendor deliver to
you, there may be options. Is there anything you can do?
Below is a proactive list. It isn’t exhaustive, but it’s a
start. Additionally, we have listed a few considerations if you anticipate
triggering your force majeure clause in a contract. Again, they are general. We
can help provide guidance and insight into your contractual issues with regard
to COVID-19. Please contact us for additional information.
Proactive Tasks to Mitigate Risk
- Analyze and document the pandemic’s effect on
your business at this moment. Analyze your future ability to meet your contractual
- Consider updating your standard contracts to
address viral epidemic or disease related business disruptions.
- Draft notice letters now if you anticipate a
delay or disrupted performance. Have them reviewed by your attorney.
- Discuss amending current contracts to state
triggering events and the notice requirements.
- Keep detailed business records.
- Stay current on all governmental and regulatory
notices and policies.
If you have a triggering event
- Give notice. Review contract and adhere to all
deadlines and conditions for notice. Over communicate. Providing notice before
the actual disruption may be required.
- Do not use force marjeure when it does not
apply. Courts are unfavorable to opportunistic claims. The more direct your
link of disruption to COVID-19 the cleaner the argument.
- Talk to the other party. Negotiate waivers,
extensions, creative solutions. It will be cheaper, faster and most likely a
better solution than lengthy litigation.
- Know you contract. Unilateral, upstream and
downstream provisions matter.
Communication and flexibility are vital to surviving these uncertain times.