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This checklist looks at the main points to consider in connection with consumer contracts in light of the issues posed by COVID-19.
1. Establish the terms of your contract.
- Consider the contract formation point.
- Consider whether any terms and conditions have been successfully incorporated.
2. Consider any cancellation and/or termination clauses in your contract.
- What are the cancellation/termination rights of each party?
- Are there any terms which provide for what will happen in the event of a cancellation or termination?
- Consider whether a party has sought to cancel or terminate without any contractual right to do so.
3. Is there a “force majeure” clause?
- Consider the wording of the clause to establish whether COVID-19 is likely to amount to a force majeure event and seek legal advice if there is any uncertainty.
- Does the clause provide for the consequence of a force majeure event, and where does this leave you? Are you still able to fulfil your contractual obligations?
4. Are there any other relevant contractual terms.
- Consider if there are any terms that deal with any change in the law, or regulation.
- Consider any terms seeking to exclude liability and whether these are “fair” for the purpose of satisfying consumer legislation.
5. Consider any implications of statute or common law.
- Could any of the terms upon which either party seeks to rely be deemed to be unfair and therefore unenforceable?
- Has the contract been frustrated?
6. What is the insurance position?
- Establish whether you are insured for any losses sustained, or that will be sustained.
- Check your insurer notification requirements.
7. Seek legal advice.
- If you have any doubt about your position under a contract in light of issues arising from COVID-19, seek legal advice.