Guidance on responsible contractual behaviour There is now non-statutory guidance in this area too.
On 7 May the Government issued, with little fanfare, nonbinding guidance on ‘responsible contractual behaviour’.
In essence, the Government’s view is, if you can, hold off relying on these types of clauses. Don’t terminate unless you have no alternative. Just because you can do something, doesn’t mean that you should. Most notably, however, the guidance makes it clear that it doesn’t override ‘any specific support or relief available’ in any relevant contracts, such as any termination provisions. In effect, this non-binding, ‘please-play-nicely’ guidance is just that: nonbinding. Businesses are not obliged to follow it and, frankly, it remains to be seen to what extent, if at all, they will embrace it, despite its worthy intentions. From a legal point of view, failure to comply with it may have no to few legal consequences. In due course, the courts may look at this guidance when determining if a party has been reasonable in a contractual dispute or, indeed, they may decide not to pay any heed to it at all. At the moment, the legal risks of not following it seem very low.
The Bill is due to be fast-tracked through Parliament, and it is likely to become law before the end of June. Parliamentary scrutiny over this Bill is likely to be somewhat lacking and things might not get picked up by legislators that ought to be picked up if there were more time. There may well be some unexpected surprises down the line in how this law works.
Northamptonshire Law Society
The general approach that the Government wishes to see is that businesses should concentrate on the long term and, ‘act responsibly and fairly in the national interest in performing and enforcing their contracts, to support the response to Covid-19 and to protect jobs and the economy.’ Or, in other words, ‘bad behaviour will be bad for jobs and will impair our economic recovery’.
What happens next?
In the meantime, businesses may wish to review their position in supply chain eco-systems as their ability to utilise contractual protections they currently rely upon may soon be severely restricted.
Disclaimer
This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.
Simon McArdle Simon is a Partner in the commercial team who specialises in a range of commercial contracts including large scale outsourcing arrangements, I.T. contracts, sponsorship and image rights arrangements and manufacturing and distribution agreements. Simon regularly advises clients in a range of sectors including the retail, logistics, food, IT, health and automotive sectors.
And Finally… ... here is a round up of the topics, events and news that were not covered in this edition from Carolyn Coles, Society Manager.
by Carolyn Coles
As I type this it is hard to comprehend just how our lives as we knew them , and those of our fellow citizens worldwide have been impacted by this Pandemic. The changes that have taken place so quickly, will no doubt take months, even years for us to regain any recognisable level of normality.
Please also let me know if you wish to add anything to the bulletin, it would be good to hear from you!
We all have had our own particular challenges to deal with and work through, and I am solicitous to the fact that as manager of Northamptonshire Law Society, I have to continue to present a “business as normal” pretence.
Stay safe,
So with this is mind, I will be continuing to arrange training events over the next few months via Zoom . If you would like to secure a place, or have a specific topic you would like me to facilitate let me know via email – sec.nls@outlook.com or give me a call on 07543662572, or 01604 881154.
Wishing you all the best of Luck as we venture back into our various workplaces.
Best wishes
Carolyn Coles
Carolyn Coles - Society Manager Email: sec.NLS@outlook.com Office Number: 01604 881154 My mobile: 07543 662572
www.northamptonshirelawsociety.co.uk
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