For nearly all personal corporations 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.  A lot of the enterprise performed by a personal or public enterprise includes 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 making an attempt to manage both with fulfilling our obligations or having our counterparties fulfill theirs, together with prospects, shoppers, contractors, distributors, insurers and extra.  A number of the agreements at subject could also be massive sufficient to have an effect on your complete enterprise, particularly at this susceptible 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 comparable to power majeure, impossibility, and impracticability of efficiency apply, together with different ideas.

The beginning factors are (1) the wording, nature and historical past of your settlement, (2) the impact of State and nationwide govt 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 by way of 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 power majeure provision excusing or suspending efficiency in sure occasions comparable to “Acts of God”, or comparable clause.  If there’s such a clause, one thing so simple as the “Acts of God” examples given in that clause may assist inform the result.  Financial obligations could also be considered in a different way than different forms of obligation.  Different questions come up, comparable to whether or not, if the contract is affected by the pandemic, efficiency is excused, restricted, delayed, and so forth.

On the insurance coverage aspect, points comparable to enterprise interruption protection could also be affected by different components:  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 numerous Govt Orders, in addition to different ideas affecting each public entities and their distributors, a few of whom are unable to carry out as a result of their providers have been rendered moot by college and different public sector closures.

You might profit by having any doubtlessly affected contract examined by counsel.  In the event you want help, please name your standard level of contact with the agency or in case you don’t have a degree of contact, you’ll be able to 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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