Having hit the milestone of “stage two” of the Government’s roadmap out of lockdown in England (with non-essential shops reopening, restaurants and pubs allowed to serve customers outdoors and outdoor attractions welcoming visitors), we have reason to be optimistic. However, the serious impact of a year of Government restrictions will make many businesses understandably cautious. For most businesses, now is the time to focus on how to ensure that they are in the best possible position to resume operations in an uncertain post lockdown economy.
It is important for businesses to review their commercial contracts as they plan to recommence trading in one form or another. It will be necessary to consider the legal implications of any action taken or contemplated to preserve contracts and business relationships, and be alive to the potential consequences of the conduct of other contracting parties. The actual or perceived amenable attitude of some parties during the pressure of the lockdown periods may quickly evaporate as we return to some sort of normality. All this is fertile ground for potential disputes.
Here are six key issues that businesses should be considering in the coming months:
- Contract variation - To survive lockdown you agreed to vary your contract. But is it binding? Did you meet the legal requirements? Did you comply with the terms of the contract you were trying to amend? Read more in our guide here
- Duress and undue influence - Did you improperly force the other contracting party to accept amendments to your contract? What are implications of such action? Read more in our guide here
- Waiver and estoppel - Even if not formally agreed, was something proposed by one party during lockdown which caused the other to act in a particular way? Can a party just walk away from what they proposed? Have rights under the contract been waived by some action or inaction by the party seeking to rely on those rights? Read more in our guide here
- Repudiation - If a contract was breached during lockdown, can the contract be terminated? If it wasn’t terminated during lockdown, can the breach be the basis for terminating the contract as lockdown restrictions are lifted? Read more in our guide here
- Specific performance - Can you be compelled to perform your obligations under a contract? Can you compel the other party to perform? Read more in our guide here
- Dispute resolution clauses - If your contract includes a series of steps to be taken to resolve disputes, can you ignore those steps because they are inconvenient as you emerge from lockdown? If the contract is terminated, do you need to follow these clauses to resolve the dispute? Read more in our guide here
We have created an initiative called “LS Unlock” to help businesses access legal advice during the uncertain times ahead. LS Unlock comprises a free initial assessment of significant commercial claims together with a menu of alternative fee arrangements which can reduce and, in certain cases, eliminate the upfront cost of pursuing a claim.
This initiative has been designed specifically to assist clients in this uncertain economic climate and is part of our commitment to working with clients to help them survive the effects of the Covid-19 crisis. Please contact either of us if you would like to discuss this further: Clive.Greenwood@lewissilkin.com and firstname.lastname@example.org
people in England will see restrictions start to lift and the government’s four-step roadmap offer a route back to a more normal life