Many businesses are struggling to comply with their contractual obligations as a result of the COVID-19 pandemic. If not already in this position, it’s very possible that businesses will find themselves in a situation where they are forced to rethink their supply chains. A focus in recent years on minimising costs, reducing inventories and maximising asset utilisation has often resulted in a reduced ability to cope with disruption. Whilst the impact of the COVID-19 pandemic is unprecedented in modern times, disruption to the global economy is an increasing risk, whether due to political events such as US-China trade tensions, Brexit, or other events such as climate change.

Now is the time to review your supplier network. You need to ensure that your supply chain will hold up and allow you to get the products, parts and raw materials that you need to continue to trade and deliver revenue. A proactive approach is encouraged to deal with this. There is no new law or guidance from the courts or the government that changes how contracts in this scenario will be treated. Businesses should keep in mind that the normal rules will apply and that if COVID-19-related issues do end up before the court, the parties will be held to their obligations and expected to work within the parameters of the bargain they struck.

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