Andy McNish

COVID-19 has exposed some assumptions made by many parties when entering into commercial contracts including such matters as the robustness and pricing of their supply chains, availability of staff, ongoing market demand, and the ability to access sites or premises.

As a rule, these things are not actively considered or discussed between the parties and are usually only covered, if at all, by a short clause inserted towards the rear of a contract under the heading ‘force majeure’ – which excuses a party for non-performance in the event that an external factor ‘outside their reasonable control’ affects their ability to perform the contract.

One lesson of COVID-19 is that these clauses are not usually in full enough form as they stand to give clarity or a fair resolution when something like COVID-19 hits, especially if the contract is a long-term/ongoing one and is likely to pick up and continue again after the force majeure event has passed.

a button on a keybaord for terms and conditions

What does it mean for contractual obligations?

In such circumstances, a clause dealing with suspension of contractual obligations should set out what ongoing obligations continue during the suspension period, what the payment position is (especially if the force majeure leads to a services or supply of goods reduction rather than total cessation), and whether either party has a right to terminate the contract as a whole after a given period of force majeure.

Also, there is the issue of whether the economic shock, and changed landscape following such a disruption, makes the ongoing financial or other obligations unduly onerous or uneconomic for one of the parties.

You can take the view that the latter is just the commercial risk of striking a deal at a given price, but there are also clauses that can be included which allow a party to terminate a contract (without liability) if circumstances change so that continuing a contract on its original terms becomes uneconomic. From the supplier side you can also try to insert a provision allowing for commensurate price increases in such cases (although this is sometimes challenged by customers).

But what you should really do the next time you are about to enter into a high-value and/or long-term contract, is just pause for a moment to consider: What would happen if another COVID-19 (or similar event) hit? Does the contract cover this at all? Or am I exposed?

For more information on our team of business experts, please click here. Alternatively, you can email Andy via or call 0161 832 3304.

Found this article useful? You might be interested in some of our others:


Read what our clients have to say...

View All

Excellent experience start to finish – always very responsive to any queries and the turnaround on the property I was buying was very quick, even in the busy time leading up to stamp duty deadline. Jenny was always very helpful and went above and beyond to close on a short timescale.

Ben Armitage

“Very approachable, practical solutions to problems, but most of all very responsive which I personally think is very important because if you need help, you need it quickly, or at least to know someone is looking at it for you”.

Joanne Rowe, Finance Director, Greater Manchester Chamber

“Always able to contact, very approachable, friendly and professional”

Nives Feely, JAM Recruitment

“I believe I have been able to establish a professional working relationship with everyone I have come into contact. Importantly, I sense the relationships which have been established give me the confidence that I can make contact with Davis Blank Furniss at any time and on any matter. I would also like to express my thanks to the very impressive “gatekeepers” who work in reception, not only for making me very welcome, but also for their professionalism”

Bill Pryke, CEO, Chartered Institution of Civil Engineering Surveyors

“Thank you for your efficient and friendly help throughout this process. We have had it easy but your approach has been part of that”.

Robert Amsbury (Conveyancing Client)

“I would like to take this opportunity to thank you personally for the ongoing support and assistance the firm has offered to our parents over the years. I hope also that we may be able to call on you if necessary in the future.”

Valerie Fisher (Probate Client)

“Jo always provides great service, understands our needs and delivers on her promises. Our needs are relatively simple but the complexity arises out of the volume of work and short time frames, Jo always delivers.”

Peter Fernandez, Corporate Director at Royal Bank of Scotland

“A big thank you to all who dealt with my wife’s claim… We would not hesitate to recommend Davis Blank Furniss to anyone that may be in a situation like we have been…”

Anon (Personal Injury client)

“Before putting my case in Kirsty (Morbey)’s capable hands I’ve met a couple of other solicitors. None of them listen to me as intently as Kirsty and showed me as much empathy and understanding as she did. Simultaneously she was able to look at my case from legal perspective, explain all the options and follow each of our meetings with written summary of the discussed matters (in timely manner). Her advice was invaluable and led me to successfully ending the case matter (hopeful for good). I’m forever grateful for he work and would definitely recommend her to anyone looking for reliable, knowledgeable and committed solicitor”.

Anon (Family client)
5 star service

Our Manchester office is rated 5 stars on Google