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Coronavirus Has Affected My Ability to Meet a Commercial Contract. What Should I Do?

For many business owners with commercial contracts in place, failure to meet those contracts due to pandemic restrictions can be an added layer of stress.

Here are some ways that businesses and company directors can explore assistance during this time.

1. ‘Force Majeure’ Provisions in Contracts

Many Australian commercial contracts will contain a ‘force majeure’ clause, which accounts for certain unforeseeable events and circumstances affecting the performance of contractual obligations.

In some instances, ‘force majeure’ clauses could also provide a right to terminate the contract, should an event specified in the clause occur, depending on the breadth of the clauses.

Businesses will need to seek advice on the application of ‘force majeure’ clauses, if any, on their supply and commercial agreements.

2. Frustrated Contracts

Frustrated contracts arise when contractual obligations become impossible to meet due to unforeseen circumstances (that are through no fault of either party) requiring a change in the initially completed contractual obligation.

Unlike ‘force majeure’ clauses, establishing frustration generally has a much narrower scope (and therefore is a more complicated process).

If you are struggling to meet commercial contracts or fear that may be the case in the future, it is important to act now.

Review your commercial contracts and seek advice on the potential options available to you including the application of ‘force majeure’ provisions or frustration.

Contact Us

If the current pandemic has affected your ability to meet the terms of a commercial contract you have in place, please contact us. We’re here to help you navigate these challenging times.

The content of this article is intended to provide a general guide to the subject matter. Individual circumstances vary and you should seek legal advice about your own individual circumstances from a lawyer.

Coronavirus Has Affected My Ability to Meet a Commercial Contract. What Should I Do? : City Pacific Lawyers

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