Managing contract disputes during a pandemic

Published on
2 min read

In the current environment many businesses are finding it difficult, if not impossible, to perform their obligations under contracts. This is our checklist for managing potential contract disputes:

What should I be doing?

  • Review key contracts to determine whether they contain “force majeure” or material adverse change (MAC) clauses
  • Get advice about whether any force majeure / MAC clauses may be triggered, or whether any contracts may have been frustrated
  • Consider whether any contractual notices need to be served
  • Check what contractual / statutory time limits apply to any claims
  • Reach out to counterparties and be pro-active about seeking to agree commercial resolutions
  • Consider doing so on a “without prejudice” basis, if there is a risk of a dispute
  • Take steps to mitigate your losses
  • Consider whether any notifications to your insurers may be prudent
  • Write to your counterparty to reserve your rights and preserve  / protect your position
  • Issue a “document hold” notice to preserve any documents that may be relevant to a dispute
  • Get advice about how best to maximise claims to legal professional privilege over any sensitive communications or documents relating to the dispute
  • Consider your legal options as well as commercial solutions – the two often work best in parallel
  • Consider which employees could be needed as witnesses in a dispute, and whether that needs to be factored into any planned redundancies

What shouldn’t I be doing?

Don’t:

  • Allow documents that may be relevant to a potential dispute to be destroyed or deleted, whether by routine document retention policies or otherwise
  • Assume you can ignore a contract merely because it contains a force majeure or MAC clause
  • Rely on any force majeure / MAC clauses or terminate any contracts without taking advice first
  • Lose members of staff who may be key witnesses and/or integral to the handling of a dispute without consideration

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