Description
The global pandemic has destabilized all areas of commercial contracting and the supply chain. Counsel must examine default and termination provisions of ongoing and future agreements and learn how to calculate damages for those contracts. Force majeure provisions in commercial contracts are now under the microscope, although the clauses were most likely given little thought at the time of drafting.
If a contract does not include a force majeure clause, a party may raise the defense of impossibility or impracticality. Under the Restatement (Second) of Contracts 261, a party can discharge a contractual obligation when "performance is made impracticable without his fault by the occurrence ... or the non-occurrence of [an event] which was a basic assumption on which the contract was made." Experience from the pandemic may allow counsel to anticipate what is possible and practicable in ongoing and future agreements.
Many businesses, particularly if thinly capitalized, are experiencing cash flow challenges. Agreements frequently include provisions that a default and termination occurs when one party files bankruptcy. Parties should carefully weigh whether to exercise early-stage insolvency-related termination rights if the counter-party experiences short-term cash flow problems. Entering contracts with new suppliers on healthier financial footing may prove more difficult, time-consuming, and costly.
The underlying economics of a fixed-price agreement made before the pandemic are fundamentally different now if change-in-law relief is not available and force majeure relief does not cover a party's COVID19-related losses and increased expenses. Parties may instead prefer to seek equitable relief to mitigate losses, such as extending the time for performance or orders of restitution.
Listen as our expert panel provides practical strategies for drafting and negotiating termination provisions of future commercial agreements to ensure clarity in issues of force majeure, the impossibility of performance, and damages to mitigate risks.
Presented By
Mr. Lakind's practice focuses on construction law including construction defect litigation, Consumer Fraud Act claims, equitable adjustment/delay claims, insurance issues related to construction, construction lien law, public bid protests, professional malpractice claims involving design professionals, and negligence/tort claims arising out of construction projects. Mr. Lakind also drafts and negotiates contracts for a wide array of construction projects, including large public and commercial projects, solar power installations under Master Service Agreements, and residential contracts. He handles all aspects of construction related litigation, including trials, depositions, motion hearings, and navigating the discovery process.
Ms. Miller is a litigation partner with Foley & Lardner LLP and Chair of the firm’s national Automotive Team, as well as on the advisory committee of the firm’s Manufacturing Sector. She served as a former chair of the Detroit office’s Litigation Department. Ms. Miller's practice focuses on a wide array of supply chain disputes, including breach of contract and warranty claims, automotive supply chain issues and maintaining continuity of supply, defending manufacturers against class actions, trade secret misappropriation claims and business torts. Recognized as a nationally ranked top lawyer by Chambers for Transportation: Road (Automotive) for the past two years, showcasing her deep expertise and leadership in the field. Ms. Miller has successfully managed, litigated and tried cases in state and federal courts, as well as handled appellate proceedings. She has significant experience handling complex international arbitrations in various venues, including the Court of Arbitration of the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), the Judicial Arbitration and Mediation Services Inc. (JAMS) and the Singapore International Arbitration Centre (SIAC). Ms. Miller also has represented clients in commercial mediations, resulting in early resolution of legal disputes and creative business solutions for parties continuing to do business together.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, October 12, 2021
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Termination provisions generally
- Triggering events
- Default provisions
- Force majeure
- Impossibility/frustration of purpose
- Insolvency
- Damages
- Increased costs
- Equitable relief
- Other damages
The panel will review these and other relevant topics:
- What triggering events and provisions should an attorney consider when drafting a commercial agreement?
- How can counsel tailor force majeure provisions in agreements during COVID-19?
- When does impossibility or frustration of purpose arise in the performance of a commercial agreement?
- How can damages be assessed in termination provisions to include the added costs of performance due to delays?
- When and how should parties seek equitable relief in commercial agreements?
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