With the Coronavirus now impacting on our day-to-day lives you may be concerned about how this will all impact your business. For manufacturers and service providers who are contract bound the consequences could be severe.
Since the COVID-19 began to spread across the UK events, conferences and training sessions have one by one been cancelled. With sporting events, such as the Premier league and the Grand National also being suspended.
Yesterday evening PM Boris Johnson addressed the Nation urging people to avoid pubs, clubs, restaurants and theatres. In addition, the Government announced a desire for people to work from home where possible and for travel to be reduced to essential travel only. Guidance on self-isolating has also been increased with seven to fourteen-day periods being recommended depending on your circumstances. These measures could have a direct impact on business productivity, resulting in disruption or supply chain and fulfilment of delivery issues. As a consequence, businesses are reviewing their contract seeking a so called ‘get out clause’, but does one exist in your contract?
Such a clause typically offers provision to excuse the performance of a party due to circumstances beyond their control such as a pandemic or an act of God. However, as in most legal matters the devil is in the detail and such clauses will need to be exercised with care. This is predominantly because there is no precedent confirming a pandemic is an act of God in the UK law, therefore arguably is not covered by the majeure clause. This also differs depending on the location of your business for example countries in the EU may have a similar clause within their civil code.
Equally if your contract does not offer any provisions for acts of God you could find your business is obligated to provide the services or goods as outlined within your contract regardless of the current circumstances.
Subsequently it is important you have your contract reviewed by a commercial or business solicitor. They will be able to unpick the jargon and work with you to achieve the best possible outcome. Our business law team will seek successive clauses and point to other possible actionable clauses to limit or mitigate your business liability.
For more information regarding your liability, contracts or a majeure clause please call Nick Attwell on 01473 229200.