Covid-19: business disruption and frustration of contracts

Many businesses will be looking at their contracts to check whether the pandemic can be used as a reason for failure to delivery or receive goods and services, but much will depend on how these contracts were originally constructed, says Gately Legal’s Rustam Roy

The Covid-19 pandemic and the resulting shut down of socio-economic life in most parts of the world have caused major disruption to many businesses. A reduction in manufacturing as well as a reduction in spending has meant loss of income and loss of supplies across many industries.

As a result, businesses have looked at their contracts to assess the level of protection available to them in these circumstances, whether that is protecting them as a supplier or recipient of goods and/or services. Many businesses are part of a supply chain and while they may seek protection at one end, they may want to resist protection being sought at the other end.

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