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How do your business contracts protect your interests as lockdown eases?

The easing of lockdown measures has extensive implications for the operations of businesses with restrictions affecting different businesses in different locations unequally.

This may affect the ability of different suppliers to deliver goods to you on time, while you may find yourself in a position where you cannot meet your usual obligations because of a shortage of raw materials or limits on the number of employees you can have in the workplace safely.

John Morgan, a Senior Associate with Mander Hadley who specialises in Corporate and Commercial law, said: “In these circumstances, you should review whether your current agreements allow for any relief from your usual obligations or contain force majeure provisions.

“You should also assess which contracts carry with them the most severe penalties where you cannot meet your obligations.

“This will enable you, taking other commercial considerations into account, to prioritise the contracts you focus your operations on.

“The next option open to you is to consider re-negotiating your supply chain contracts to ensure they are effective in protecting your interests.”

Terms you might need to vary include:

  • The value of payment in respect of certain goods;
  • Timescales for making payments;
  • Timescales for delivering goods;
  • The quantity of goods that will be delivered;
  • The specification of the goods that will be delivered; and
  • The penalties that failing to meet obligations will attract.

John added: “The complexity of supply chains means that you should seek advice at an early stage where you are either concerned that a supplier may be unable to meet its obligations or where you are concerned that you may not be able to meet your own obligations.”

For help with business contracts, please contact us.

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John Morgan

John Morgan

Senior Associate – Corporate / Commercial at Mander Hadley Solicitors
A law graduate of Warwick University, I trained and qualified as a solicitor in London in 1977 before spending several years in the Middle East where I acted on major corporate, commercial and banking transactions, many with an international aspect.

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