Reviewing Your Contracts In Response To Covid-19

As we all deal with the fallout of the Covid19 pandemic, businesses may need to review and evaluate their existing contracts to assess relevant rights, remedies and/or obligations that may come into play in the coming days and weeks.

Following are contracts and provisions that may require attention. For the time being, we’re offering contract review and consult on a complimentary basis to help our clients and community weather this storm. Please email me here to set one up.

Commercial Agreements.

  • Force Majeure- Are your contractual obligations excused due to an act of Force Majeure? Does the current pandemic rise to the level of an act of force majeure under your contracts? How long does the Force Majeure need to last under the agreement?

  • Are there notice requirements which you may need to give or receive?

  • Is there a termination right as a result of the pandemic, either by you or the other party?

  • What are the consequences of a breach or default?

  • Who is responsible for a break in a supply chain agreement?

Commercial Lease Agreements

  • Does a force majeure provision excuse payment of rent or delays in performance?

  • Does business closure prevent lease performance by landlord or tenant?

  • What provisions may impact a request for rent deferral?

Financing Agreements may be impacted as well in a variety of ways, including

  • Financial Covenants - are you able to meet your payment obligations and maintain financial ratios / covenants under your credit facilities.

  • Material adverse events- Does this situation rise to the level of MAE and if so, what actions are triggered as a result?

  • What representations and warranties have you given or received may be affected by the pandemic?

Employment Agreements. What are your obligations under employment agreements with respect to leave or severance pay?

Insurance Policies. Do your policies offer coverage for business interruptions or closures?

M&A Agreements. Are there indemnity provisions, reps and warranties, and/or financial or other covenants that may be triggered by the Covid-19 outbreak and resulting economic impacts?

Stockholder or Investor Agreements. Do your governance-related documents contain notice, Board-related or other voting provisions that may be triggered?

These are unprecedented times and events. I know we’ll get through it. Let’s do it together.