Ipso facto clauses Okay, most of us will ask what that means, and does it apply to me? In English, this is a clause within your terms and conditions of trade that state the contract shall terminate upon the customer enter- ing into any form of insolvency. A new section 233B is being inserted into the


Insolvency Act whereby such termination claus- es shall be considered void and no longer be enforceable.


Continuation of supply Te Insolvency (Protection of Essential Supplies) Order 2015 already prohibits suppliers from refus- ing to supply an insolvent company and/or seek- ing to vary the terms as a condition of continued supply. However, the Bill takes this further and makes it


clear it is unlawful to hold out for ransom payments (i.e. demanding pre-insolvency debts are paid as


a condition of supply). This could cause some practical difficulties, including if you have credit insurance, yet pre-insolvency you had reached the credit limit with the insolvent company. Te only protection it appears you have is being told your post-insolvency debt shall be paid as an expense of the moratorium period or, failing that, holds super priority in the subsequent insolvency. Small com- fort, I would suggest. The key message for suppliers is to keep


track of your customers (in terms of the warn- ing signs leading to failure) and ensure they stay within credit limits you feel comfortable providing.


Should you have an insolvency-related issue, or a corporate dispute, then contact Gary Pettit at PBC Business Recovery & Insolvency on 01604 212150 (Northampton office) or 01234 834886 (Bedford office). Alternatively, email garypettit@pbcbusinessrecovery.co.uk or access the website at www.pbcbusinessrecovery.co.uk


ALL THINGS BUSINESS


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