Following the successful re-opening of non-essential shops, and outdoor service at restaurants and pubs, businesses in the hospitality and entertainment industries in England are gearing up to fully re-open their doors. After the disappointment of early May when hospitality bosses lost a legal challenge for a faster reopening for indoor dining, indoor entertainment venues, cinemas, museums, restaurants and pubs are eagerly awaiting “stage three” of the Government’s roadmap out of lockdown, confirmed for 17 May, when they can welcome customers back to their indoor spaces.
As operations resume with even fewer restrictions and businesses cautiously, but optimistically, open their doors, it is more important than ever that businesses ensure they review their commercial contracts as part of their preparations to recommence ‘normal’ trading later this month. It will be necessary to consider how contracts operate in a post lockdown economy and how they may have been impacted by things done, or not done, when the restrictions were in force.
Here are six key issues that businesses should be considering:
- 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 as they ease themselves back to full trading operations. 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 the uncertain future economic climate and is part of our commitment to working with clients to help rebuild their businesses. Please contact clive.greenwood@lewissilkin if you would like to discuss this further.
Gathering limits will be eased. Outdoor gatherings will be limited to 30 people and indoor gatherings will be limited to 6 people or 2 households (each household can include a support bubble, if eligible).