8th September 2020
If you are one of the thousands of business owners in the UK who have had to adapt during the last few months to survive the coronavirus pandemic, then it is likely that some of your contractual arrangements may not have kept pace with the changes you have had to make.
As companies and customers adjust to a new way of life and new ways of doing business, it is important to take stock of the way things are now having to be done and to ensure that your current practices and contracts remain aligned.
Some suggested areas that may need your attention in order to reflect your new ways of operating and protect you from risks:
A good place to start is to review new contacts you have put in place since the pandemic took hold. Ideally there should be written agreements on file for every contract that has been agreed by those involved.
It is worth playing scrutiny to Third Party Provider Contracts and Online / Telesales Agreements.
Many businesses have had to instruct the services of third parties to help them adapt and survive during the coronavirus pandemic – from delivery companies, to temporary staff or the provision of remote IT or PPE.
Where third parties are carrying out services on your behalf, they may require access to personal data held by your business which is covered by the Data Protection Act. Ensure you get up to speed with; what data they have access to, length of access, length of contract, their security measures, and agreements.
Online and telesales contracts also require careful consideration, particularly where you have never used these mediums before, as your contracts are unlikely to take account of distance selling rules. These include the Consumer Contracts Regulations 2013 which holds businesses responsible for a number of requirements along with the E-Commerce Regulations 2002 with specific VAT and reporting rules where you plan to sell into the EU.
Once your newest contracts have been addressed, the next step should be re-visit existing contracts that you hold with longstanding stakeholders which have been amended to take into account temporary pandemic-related concessions.
You may have needed to act quickly at the start of the pandemic in order to continue doing business, so take time now to look back and ensure that your contracts have been correctly amended and whether the concessions still stand or should be re-evaluated.
When considering your position, bear in mind that we are still in a state of flux and that while the direction of travel at the moment looks good, there is still a possibility that things could change.
Wherever possible it is a good idea to try and maintain advantageous concession arrangements for as long as possible.
The final step is to review any other contracts you have in place to determine whether these, too, may need amending to help you cope in the new business environment. If they do need amending, then you should consider seeking a temporary variation of your contractual obligations in much the same way as you have already done with your key contracts. Alternatively you could suggest the insertion of a permanent new general pandemic clause into your contracts which will automatically set in motion a series of measures whenever performance of contractual obligations becomes difficult for pandemic related reasons, whether that be Covid-19 or other future global health crises.
Keep in mind that health and safety provisions may need to cater for long-term social distancing should they remain in place long term, or indeed be reintroduced in the event of further waves of the virus.
Months after the coronavirus hit, the UK is still experiencing uncertainty and volatility, and will be for some time to come. Business owners need to be cautious, sensible and make sure any contracts they are entering into are well-thought out and where possible allow for flexibility.
For further information or advice on how to conduct your own coronavirus contract review, please contact our Company Commercial Team on 01256 844888, email email@example.com or speak to our online chat assistant who is available online at any time of day.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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