"Lessons Learned" in the light of the coronavirus crisis - should your standard contracts undergo inspection?
Many companies have encountered numerous legal challenges since the beginning of the coronavirus crisis and have therefore been seeking answers to several unpleasant questions in their contracts. Plesner's Commercial Contracts team looks at how to optimise contracts in the aftermath of the coronavirus outbreak.
One of the experiences many have gained is that they have not spent enough energy on ensuring that the company's contracts may offer protection when the crisis does strike. Some of the questions to which companies have unsuccessfully been trying to find answers in their contracts include:
- How are the prerequisites and reasons for the conclusion of the contract described? And what options does the contract offer if the prerequisites for the contract no longer exist or have changed significantly? - is it possible to renegotiate the contract or parts hereof?
- Is the notice of termination reasonable and can it be shortened if the basis for the conclusion of the contract has disappeared in whole or in part?
- Is the coronavirus crisis considered force majeure? For instance, is it considered force majeure if a crisis exists and one's performance is paying for a delivery or service? Or is it considered force majeure if you cannot pay?
- Does the contract contain back-to-back coverage by which we can raise claims against our suppliers if we are met with claims from our customers? And can we invoke force majeure against our suppliers in all cases where our customers invoke force majeure against us?
- Is the liability sufficiently regulated in the contract in cases where the situation is not considered force majeure? And is it possible to insure against it?
- Why are our standard contracts not uniform? And how do we ensure the optimum handling of the coronavirus crisis when our contracts provide different answers?
During the coronavirus crisis, Plesner has continuously assisted companies in finding answers to these and many other questions. One of the experiences we have gained from the coronavirus crisis is that companies may benefit from letting their contracts undergo scrutiny in order to ensure that they are better prepared should an unforeseen event hit again.
At Plesner we are ready to be your sounding board when optimising your company's contract portfolio in the light of experiences gained from the coronavirus crisis.
