Covid-19 (Coronavirus) – Key Commercial Considerations

The CMS Commercial group recently held the webinar on Coronavirus – Key Commercial Considerations. If you did not have a chance to attend, please find below the top 10 action points from the session as well as a playback of the webinar and the slides. The article on COVID-19 and its impact on the commercial sector based on the webinar discussion is here.

Should you wish to contact any of the speakers, please find their details below and they will be more than happy to answer any questions you may have.

We also encourage you to check the CMS Force Majeure Guide in which you will find an useful overview of the meaning and interpretation of force majeure across over 30 jurisdictions worldwide.

Please check CMS Insight page on COVID-19 and CMS Law-Now for more updates on Covid-19.

Top 10 action points for commercial lawyers in the present crisis

•  Identify which law is applicable to contracts and the rights and obligations flowing from it; don’t forget that contractual choices of law may be overridden by mandatory rules based on local or international law, such as the test of reasonableness to be applied to force majeure clauses in written Ts and Cs.
• Be aware of differences between jurisdictions concerning the legal effect of force majeure clauses (and in particular the default in the absence of any contractual provisions), as well as concerning which circumstances are treated as force majeure. See the CMS Force Majeure Guide.
• If one of the parties is relying on its Ts and Cs make sure to check if they indeed became part of the agreement. In some cases the Ts and Cs may have been knocked out or superseded by the other party’s Ts and Cs (principle of battle of forms, please make sure to consult the CMS Expert Guide to the Battle of the Forms.
• Consider the causal link between non-compliance with contractual obligations and the claimed force majeure event; just saying “COVID 19” is likely not enough.
• Keep evidence of the force majeure events.
• Keep evidence of measures which have been taken to avoid force majeure and to mitigate damages.
• Evaluate the implications of notifying a force majeure event – do you want to trigger a termination right, particularly where the force majeure might impact only on a small part of a contract.
• Follow formalities on notification procedures and other steps required by contracts; make sure the message in the notification is clear.
• Capture evidence that notification has been delivered to the counterparty, for example by the use of the send and (if possible) read confirmation button in email client programs; check your notices clause.
• Seek to take advantage of governmental emergency measures – but be aware of huge differences in their nature and scope between jurisdictions.
• Keep lines open with counterparties – what we are currently seeing is that most commercial disputes are likely to be resolved by negotiation.

Download webinar recording