27 Mar 2020
Industry News
COVID-19 – Practical Commercial Steps for Businesses to Take During the Pandemic
We have been working with a whole range of businesses to help them address the many commercial issues thrown up by coronavirus. As well as participating in the various government schemes which have been launched, there are other practical steps that business can be taking as set out below. Please do get in contact if the Boodle Hatfield team can help and, in the meantime, we hope everyone remains safe and well.
Contracts
- Coronavirus
is having a massive impact on companies’ ability to meet their contractual
obligations, which can lead to significant losses. You should check:
- Force majeure provisions: if you are unable to perform your obligations under a contract due to coronavirus this may constitute a force majeure event, entitling you to suspend performance of those obligations. A lot will depend, however, on the exact wording of the relevant contract.
- Termination provisions: if the force majeure provisions do not assist, it is worth checking the termination provisions. For instance, contracts can be sometimes be brought to an end relatively quickly by giving notice to the counterparty.
- Frustration: if coronavirus makes it physically or commercially impossible to fulfil a contract then in certain circumstances the contract can be considered as discharged.
Insurance
- Whilst most standard business interruption insurance does not include forced closure by authorities, it is still worth checking as we have seen policies which cover closure due to infectious diseases.
- Insurers are unlikely to be volunteering this information but if you would like your insurance policy double-checked, please don’t hesitate to get in touch with us.
Lenders
- We are finding that, following pressure from the government, traditional lenders are willing to be more flexible than normal and that accordingly businesses are able to renegotiate their borrowing terms.
- In addition it is worth checking whether any of the grants, loan schemes and other government support measures apply to your business. Details of these can be found here.
Employees
- There are a number of trends we are seeing in the market in relation to employment related matters.
- We’ve created a separate note on these and the government’s new Coronavirus Job Retention Scheme. Both notes can be found here.
Property
- The temporary ban on commercial property evictions is giving tenants breathing space to negotiate with their landlord.
- Talking to your landlord during this difficult time is key – see our other suggestions here.
