Partner Debbie Brett, in Blandy & Blandy Solicitors’ corporate & commercial team, explains the possible impact of the Coronavirus on commercial contracts with The World Health Organisation (WHO) having declared COVID-19 a global pandemic.
Coronavirus and commercial contracts
The WHO has now declared the Coronavirus (COVID-19) a global pandemic – so what does this mean for commercial contracts and in particular bookings for major and corporate events?
Our Corporate & Commercial team has already been asked to advise on the cancellation of supply contracts and event bookings for corporate events in recent weeks. At that time there had been no officially declared pandemic, nor any UK national governmental decision placing travel or other restrictions on individuals save for those returning from travel abroad to category 1 and 2 countries who may be obliged to self-isolate. Matters continue to move at apace but the declaration of a global pandemic may now enable parties to utilise their force majeure clauses in their contracts should they be prevented from fulfilling contractual obligations by virtue of the virus and its effects.
Many businesses have made, or are having to consider making, a decision whether to go ahead with corporate events that involve travel and/or group gatherings in situations where they have already paid or committed to pay not insignificant sums of money by way of deposits and advance payments.
Force majeure and the doctrine of frustration
As matters currently stand, under English law a party to a contract, even one affected by the Coronavirus, is required to perform its obligations under the contract and will be potentially liable to the other party to the contract for failing to do so. There are two key exceptions to the rule:
Making a decision
If you are faced with having to make a decision about an event or other contractual obligation, then we advise you consider the following:
For further information, visit www.blandy.co.uk.
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