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As the new ‘lockdown’ measures have come into force to help slow the spread of COVID19, it is inevitable that the restrictions placed on businesses will affect their ability to work effectively.

In some cases, this could mean that existing contracts that were put in place previously, cannot now be fulfilled. From the supply of a product or service to contractual hours and workload, the effect on companies is expected to be vast.

So what happens if a business is now unable to fulfil its existing contracts due to COVID19?

If the restrictions imposed mean that you or your business are unable to meet the terms of an existing contract you have in place, you should be aware of two concepts that may be relevant to that contract.

  • Discharge by Frustration

Where it becomes impossible for a party to perform its obligations, the contract may become ‘frustrated’ (i.e. cancelled) where the event was not the party’s fault.

  • Discharge by Force Majeure

In some cases, there is a clause in the contract that removes liability for unavoidable catastrophes which release the participants from performing their obligations. For Force Majeure to apply, there have to be specific references to it in the contract.

If you are concerned about being unable to fulfil an existing contract you have in place or a company is unable to meet the terms of their contract with you, speak to our Tim Ollerenshaw to help you.  

We are still fully able to provide our services to you in these difficult times.

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