Information on how COVID-19 could affect your contracts and agreements.
Good contracts are like instruction manuals for business relationships. The contract will outline each party’s rights and obligations, and provide a roadmap for how to resolve any disagreement or dispute. Unfortunately, not all contracts are “good contracts,” and even “good contracts” do not (and cannot) anticipate or address every possible risk or outcome. In other words: Each contract is different, and there is no “one-size-fits-all” answer to any legal question about contracts. Accordingly, the information on this site is generic in nature and is not based on your (or any) particular contract or situation, so it may not apply (or may apply differently) to your given circumstances.
Additionally, regardless of what your contract says (or does not say), a good starting point is to have an open discussion with the other party about how the COVID-19 pandemic is affecting each of your business operations (and employees and bottom lines), and discuss ways to find a solution that works for both parties. There is a good chance that the other party is facing similar issues (whether related to your contract or with other contracts), so hopefully there is a way that you can work together to find a solution and maintain a positive working relationship.
Regardless of how you decide to proceed, you should always document any amendment or change to the contract by creating a simple document that references the original contract (including the name and date of the agreement) and identifies the specific amendments or changes that the parties are making. If the other party will not agree to any amendment or change, you should send them an email (or letter) stating your position, your requested amendment or change, and their response. While this may feel somewhat awkward, it is a worthwhile step to take if you expect that the other party may (eventually) seek to pursue you for a “breach” of the contract — it will certainly not protect you from liability, but it will show that you made a good-faith effort to resolve the disagreement or dispute.