As the 2019 Novel Coronavirus (“COVID-19”) continues to spread across the world, and governments and health authorities work to defeat it, businesses are facing weakened financial markets, as well as disruption to workplace operations and business pipelines due to restrictions to the mobility of people and goods.
Major economies are experiencing mounting pressure as consumer spending, production and investment are drastically curtailed due to virus-related risks. While the primary focus of any business will be on ensuring the health and wellbeing of staff, businesses are facing an increasing number of challenges that need to be addressed and mitigated. The legal implications are wide-ranging and complex.
Many companies are facing significant and urgent business and legal challenges including:
- How to renegotiate or terminate contracts where the activity in question is no longer commercially viable
- Available options should businesses have difficulties in fulfilling their existing contractual obligations because of business disruptions
- Invoking force majeure clauses
- Ensuring steps being taken to safeguard employees are also meeting key obligations under relevant laws
- Options available to companies when core supply chains are disrupted
- Renegotiating lending terms or applying for bridging or emergency funding, should it be necessary
While the situation is unprecedented, many of the answers lie in long-standing general laws and regulations, including those related to public health and work safety, as well as emergency measures recently issued by governments to specifically deal with the outbreak.
There is huge uncertainty as to the course that Coronavirus will take, but uncertainty is not a justification for companies and their directors to ignore the threat posed by the virus. Planning must include how to handle existing transactions that may be at risk from the virus, as well as the protections required in transactions being negotiated now.
As the WHO declares the COVID-19 outbreak a pandemic, businesses operating in ALL countries, not just hot spots need to be prepared.
How MDM Law firm can help you
The coronavirus is going to present significant operational and commercial challenges to every business. Every company will face difficult decisions. In addition to making our own business continuity preparations, we have also been preparing our team to ensure we are ready to apply our expertise to support our clients however and wherever that may be needed. Please visit our latest insights on the impact of coronavirus. This is what we do, we provide proactive advice to support our clients in their time of need. Please allow us to help.
We will keep you updated with any significant updates or changes in our approach and of course, we wish you, your colleagues, friends and family well during this time.
To discuss the business and legal implications for your company, please get in touch with your usual MDM Law firm contact or use our contact form.