Your business and Coronavirus / COVID-19

Individuals and businesses across the world are facing changes that seemed inconceivable just a few weeks ago. The outbreak of COVID-19 across the globe is causing a large amount of upheaval in the business world.

The lawyers here at Saunders are well equipped with remote working tools and ever more motivated to assist our clients through the challenges they face in this ever-changing landscape.

A large number of individuals and businesses will be struggling to meet their contractual demands at present and in turn, this will have a direct impact on the other contracting parties, who are likely to also have contractual obligations that they need to fulfil.

How coronavirus could impact on your contracts

As a result of the coronavirus pandemic, businesses both large and small are feeling the impact.  Cash-flow, supply chains and insolvency events will cause significant short and long-term disruption to business.

We think it is important that all businesses consider these risks.

Businesses cannot be blamed for having concerns about the current status of their contracts and we think it is very important that they know how to attempt to protect themselves from costly litigation.

What if contractual commitments can’t be satisfied?

With any contractual obligation, the starting point is always to read your contract. The rights that you or the other party have will be born out of that contract and the wording really matters.

If you don’t have a formal, written contract, ascertaining your options might be trickier, involving the piecing together of emails, other documents and words said.

A failure to meet a contractual obligation can cause the other party to terminate the contract and claim damages in the form of losses they have suffered as a result of that breach.

We think it is important at this time for all businesses to be assessing where their business stands in the relevant supply chains (if any).

All businesses should be reviewing their contractual relationships to understand how they may be impacted by COVID-19.

If forecast that a breach is likely to take place by the other party, you can in turn consider how this will affect the day to day running of your own business and be prepared in trying to limit any of your own breaches in other contracts that you are a party to.  This really matters in complex supply chain agreement.

You can then plan and mitigate the impact on the day to day running of your business and adjust working practices or staffing levels accordingly (should this be appropriate).

An assessment of business relationships is sensible, not only so that you can understand the impact on your business but also to consider whether there is any sort of dialogue that can take place to alleviate the consequences that a breach may have. Talking and negotiating are more important than ever.

Force majeure clause?

A force majeure clause relieves a party of its obligations to perform a contract in the face of certain extraordinary circumstances.

Having a force majeure clause in your contracts could assist in the wake of COVID-19 and the government restrictions that have been placed on parties. However, this will completely depend on the wording of the contractual clause and likely the type of disturbance caused to your business or the other party.

Debt recovery

Keeping on top of unpaid invoices and credit control is more vital than ever.   Cash really is king.

Our specialist debt recovery lawyers are always mindful of the realistic prospects of recovery when clients and understand the unique environment in which we now operate.

Getting one of our debt recovery lawyers doesn’t mean that your relationship with the debtor will be permanently at an end, or it’ll take years to receive payment.  We are well-known for exploring all options, efficiently, to get the right result.

Our commercial litigation lawyers

Our commercial litigation lawyers are business experts and can provide quick, efficient and commercially sound advice, if your business needs help.  Our focus and drive will be on keeping your business running smoothly, whether through gentle encouragement of others or more formal court action.


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