Covid-19: What do I, as Head, have to do about my contracts?
Updated: Apr 7, 2022
I am sorry to outline yet more problems for Heads and Business Managers, but Covid-19 means you need to inform your suppliers of your understanding of Covid-19 in respect to your business relationship.
It is unlikely that your contracts anticipated the exceptional circumstances we currently find ourselves in however they will probably include general terms such as ‘outside the control of the parties’ or a list such as ‘plague and epidemics’ etc. You will hear various terms such as ‘Force Majeure’, (superior force or, in more common language, Act of God), ‘exceptional circumstances’ and ‘exceptional events’ being used to describe the Covid-19 event.
It is unlikely that these terms will be defined in detail and therefore you will rely upon the definitions of bodies such as the World Health Organisation. You will need to take advice on the application of specific clauses.
It is likely that such clauses will set out how much notice you are required to give if you need to stop service or payments; how such decisions must be communicated and who must be informed along with requirements for documentation and authorisation.
I am sorry to outline yet more problems for Heads and Business Managers, but Covid-19 means you need to inform your suppliers of your understanding of Covid-19 with respect to your business relationship. Yes, you need to give formal notice of your intentions but transparent, open dialogue that enables you to decide jointly what you are going to do will sustain a working relationship into the post-crisis period.
What you need to do today
Create a list of all your contracts;
Identify relevant clauses and consider their content;
Consider whether other clauses need to be triggered;
Notify your supplier of your intention to exercise the ‘Force Majeure’ or other ‘exceptional events’ clause;
Include all the details you are required to provide under the contract;
Open a dialogue with suppliers to discuss possible outcomes: temporary suspension of the agreement, termination or a different solution altogether.
We assume that many of you are working from home at the moment and may not have access to the contracts so have set out a Notice template below which you can use in these circumstances:
Notice template for a closed school
Dear Sir,
RE: Covid-19 and the closure of Schools ordered by the PM with effect from the 20 March 2020 and the subsequent advice to stay home on the 23 March 2020.
The above statements have made it impossible for the [school name] to continue operating normally and as such we give notice that, in our opinion, a Force Majeure event has taken place.
The above conditions make it impossible for us to review our contract with you as it is currently inaccessible to us. We are therefore providing this notice in good faith and when we are permitted to enter the school again, we will seek to comply with the specific requirements of the contract. [School Name] reserves all its rights at this time.
[School Name] understands that for all businesses this is a difficult time and we are willing to work with our suppliers; to that end please contact [e.mail] if you are able to provide a copy of the contract *and if you have any proposals on how we might resolve the situation*.
Yours faithfully,
*The portion in italics can be deleted if you wish
If your school is still open or if you have access to electronic versions of your contracts we can provide you with a service to resolve these matters for you.
We will create a register of your contracts and a set of formal notices in accordance with those contracts. This work can be done remotely or on-site (assuming it is possible to maintain social distancing requirements at your school) for a fee of £500 plus VAT.
We are also able to undertake negotiations with suppliers on your behalf and will provide a ‘Value Added Register’ as part of the service. The register identifies where we have been able to add value and shows the associated value, if quantifiable. This service can be provided at £60 per hour plus VAT.
