For nearly all personal firms and public entities, the COVID-19 pandemic presents a myriad of challenges.  One of many key areas affected is the entity’s roster of contracts.  Many of the enterprise carried out by a non-public or public enterprise entails contracts in a single sense or one other.  The query is the extent to which these contracts have been affected by the pandemic, on each a enterprise stage and a authorized stage.

COVID Contract Blog Post

Commercially, we’re all attempting to manage both with fulfilling our obligations or having our counterparties fulfill theirs, together with clients, shoppers, contractors, distributors, insurers and extra.  A few of the agreements at challenge could also be giant sufficient to have an effect on the complete enterprise, particularly at this weak time. The query is the extent to which the pandemic eliminates, reduces or triggers the authorized obligations of both you or your counterparty to carry out.  It is a sophisticated and fact-specific evaluation for every contract.  Doctrines akin to pressure majeure, impossibility, and impracticability of efficiency apply, together with different rules.

The beginning factors are (1) the wording, nature and historical past of your settlement, (2) the impact of State and nationwide government orders and different governmental actions, a few of them industry-specific; (2) whose State’s legislation applies, and (3) how a court docket would view the pandemic when it comes to affecting the general financial system, your {industry}, or your particular enterprise (or your counterparty’s).  The evaluation is totally different relying on whether or not your contract has a pressure majeure provision excusing or suspending efficiency in sure occasions akin to “Acts of God”, or comparable clause.  If there may be such a clause, one thing so simple as the “Acts of God” examples given in that clause may assist inform the end result.  Financial obligations could also be seen in a different way than different kinds of obligation.  Different questions come up, akin to whether or not, if the contract is affected by the pandemic, efficiency is excused, restricted, delayed, and so forth.

On the insurance coverage facet, points akin to enterprise interruption protection could also be affected by different elements:  the wording of the coverage, a court docket’s view of the pandemic as a matter particularly affecting one’s insured property, laws being thought-about to boost the possibilities of enterprise interruption protection, the constitutionality of such legislative efforts, and extra.

Within the public sphere, the issues are much more advanced, and contain extra particular laws, some emergency laws, and a lot of Government Orders, in addition to different rules affecting each public entities and their distributors, a few of whom are unable to carry out as a result of their companies have been rendered moot by faculty and different public sector closures.

You could profit by having any doubtlessly affected contract examined by counsel.  In the event you want help, please name your ordinary level of contact with the agency or in case you shouldn’t have a degree of contact, you may inquire with Clark Alpert, Esq. as to agreements within the personal sphere, or Stephen Edelstein, Esq. as to agreements involving public entities.

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