COVID-19 – Why education institutions should consider renegotiating their contracts

COVID-19 – Why education institutions should consider renegotiating their contracts

As we do not have a full picture of what the consequences of the current crisis might be, it is more important than ever to ensure that any changes made to contracts are documented in the correct format. This is not only to ensure clarity between contractual parties, but also to ensure that any changes made are enforceable and legally binding.

We would always recommend making any contractual changes to a contract via an addendum or additional agreement whereby each party clearly documents how the original contract should be changed, the date the change will take effect from and requiring a signature from each party’s authorised signatory. Read our article on executing commercial deeds and documents.

In many instances, documenting a change to a contract in writing is not just a recommendation, but a necessity.

Some contracts may determine that a change to the contact shall only be valid if it has been documented in writing (noting that email may be specifically excluded as a form of legally binding communication) and signed by the contractual parties.

It is therefore imperative that any discussions taking place to renegotiate or change contract terms are documented correctly in order to avoid arguments later in connection with enforceability, which can cost both unnecessary time and money.

Protecting your future contracts

In addition, there is usually no automatic right to require the renegotiation of contractual terms. For contracts currently being negotiated and entered into, our recommendation would be to include automatic renegotiation clauses (triggered directly as a result of consequences of coronavirus), which could provide useful contractual protection in the near or distant future for projects or contracts which are impacted.

Contact us

To discuss any of these issues or to consider more general commercial please contact Hema Singhal or another member of the commercial team in your local office.

Shakespeare Martineau has launched a free legal helpline, with a team of experts on hand for any queries on family and private matters. We are also offering bespoke guidance on a range of other subjects, from employment and general business matters, through to director’s responsibilities, insolvency, restructuring, funding and disputes. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

General advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.