Your contractual obligations don’t just automatically stop because you’re in lockdown.
Your business may be at risk of delay costs, have refund liabilities and exposure to regulator scrutiny under the Australian Consumer Law, or be in breach of contract and subject to a claim for damages, costs and even consequential or indirect losses.
With the latest NSW and Victorian Government measures announced to combat recent COVID-19 outbreaks, it’s critical that you check the impact on your business’ contracts and supply chain. Now is the time to ensure you understand:
- Do your contracts have a force majeure clause and what exactly does it cover?
- In what circumstances is a contract ‘frustrated’?
- Applicable contract terms or (compliant) cancellation policies and any cost consequences.
To help you we have prepared a comprehensive COVID-19 Contract Guide that deals with cancellations, force majeure, frustration and non-performance due to COVID-19.
In the current COVID-19 context, each business will be affected differently, due to varying state government restrictions and health directives, as well as different customer and supplier contract terms and conditions and cancellation policies.
Regulators such as the Australian Competition and Consumer Commission (ACCC) have publicly indicated their expectation that businesses must treat consumers fairly and are watching closely for any unconscionable conduct or breaches of applicable consumer protection laws.