BUSINESS


Reviewing contracts to mitigate Covid impact


Associate solicitor for corporate andcommercial Peter Kouwenberg at law firm Taylor Walton deals with all types of commercial contract including terms and conditions of business, distribution agreements and subcontracting. Here he looks at how Covid is impacting commercial contracts.


I 14 February 2021


n recent months, global supply chains have come under immense pressure due to the outbreak of Covid- 19 and the resulting pandemic lockdowns. Not only this, but there has been a lot of confusion concerning where responsibility for delayed, missed and incomplete deliveries should be directed. Once again, the problems illustrate the underestimated importance of contracted clauses, like ‘force majeure (FM)’, which is designed to address issues arising from unexpected future events that are beyond the control of the contracted parties.


We are yet to see significant judgments in large FM claims, due to the length of time it takes for these cases to reach court, however, the Courts have already handed down judgments on injunctions related to FM clauses for actions and breach of contract. Each FM clause should be considered on its own words and context, which serves as a clear warning for businesses to ensure their FM clauses are drafted carefully in the current climate. For these clauses to successfully defend a breach of contract, they must include the correct terms, so that the effects of the pandemic are covered.


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