Last Wednesday, the World Health Organisation declared the coronavirus a pandemic; a worldwide issue with worldwide implications. Notably, the legal effects of coronavirus will become increasingly clear within the coming months. But what do we know now in relation to how your contracts operate in this period of panic? In this article, we will outline the key notions of how business and employment contracts operate; noting what you need to ensure to be ‘legally covered’.

In this time, it is vital to review your contracts to see whether the terms will be affected. As the coronavirus has been unanticipated, the likely answer is that they will. Therefore, you should be asking questions of your contracts.

For employment contracts, ask: if myself or a staff member is self-quarantining, how will this affect payment of wages? For contracts with your bank, ask: if cash flow becomes tight, how will I renew and negotiate the terms for more leniency given the events?

Force majeure refers to a clause that is included in many commercial contracts to remove liability for natural and unavoidable catastrophes that interrupts the expected course of events and restricts participants from fulfilling obligations.

Force majeure examples include war, riots, earthquakes, hurricanes, lightning and can apply to pandemics.

As to whether this applies to your particular contract, you will need to check.


Need Help?

During this time, it is important to seek legal advice specific to your situation. We, at The Quinn Group, can provide you with specific strategies for how to manage your contracts during this pandemic. You can contact our team of experienced commercial lawyers clicking here to submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange a teleconference or appointment.