Mar 23, 2020
Contractual Relations and Covid-19
By: David Taub, Jonathan Zepp, Charlie Kim and Philip Holdsworth
Contractual Relations and Covid-19: weathering economic contraction
The spread of the novel coronavirus, Covid-19, has triggered the exercise of numerous emergency powers by the Federal, Provincial, and Municipal governments. Changes to legislation and regulations to address rapidly evolving health and economic threats have been announced and directions issued, with more continuing to follow.
At the same time, the legal landscape for commercial enterprise is shifting. As the economic realities of social distancing directives begin to manifest, straining companies’ cash flow and balance sheets, these unprecedented circumstances are raising legal issues that infrequently arise for many businesses.
In this article, we consider the immediate contractual issues companies are likely to encounter as everyone adjusts to the rapidly changing business realities of operating during the Covid-19 pandemic.
The specific application of the legal principles set out below will depend on the particular circumstances of each case, any applicable contracts, and the parties involved. If your business is faced with complex decisions in responding to the unprecedented challenges posed by Covid-19, be sure to seek legal advice from legal counsel for advice on navigating this turbulent business environment.
Preparing for Economic Contraction
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