Govt and industry advice on avoiding COVID contract disputes

 

The Government and the construction industry have outlined guidance on responsible performance and enforcement of contracts impacted by the COVID-19 emergency.

The Cabinet Office published a statement on the general expectations of businesses as they manage and enforce B2B contracts during the COVID-19 emergency.

It calls for 'responsible and fair behaviour' in key areas such as:

  • requesting, and giving, relief for impaired performance
  • requesting, and allowing, extensions of time, substitute or alternative performance and compensation
  • making, and responding to, force majeure, frustration, change in law, relief event, delay event, compensation event and excusing cause claims;
  • requesting, and making, payment under the contract;

And the Construction Leadership Council COVID-19 Task Force published more detailed, practical guidance for all companies involved in the construction supply chain on how to minimise potential disputes.

The CLC document seeks to provide examples of the types of issues that are likely to arise, together with practical advice on how to resolve them in a constructive manner.

It is supported by the Cabinet Office statement outlining behavioural expectations.

'We welcome the endorsement of our approach from the UK Government in its Guidance on responsible contractual behaviour in the performance and enhancement of contracts impacted by the COVID-19 emergency.

'This is a rapidly developing situation and we are continuously seeking feedback from industry on the challenges faced and the measures announced to date.

'We anticipate that all businesses will understand the unprecedented situation we find ourselves in and work collaboratively, thus avoiding the need for future legislation.'

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