Action Item: Pay Attention to the Notice Provisions of Your Contracts in the COVID-19 World

hand signing contract

FYI – לידיעתך

For most of us, our email is flooded with various articles on how to deal with COVID-19 in the business and legal environments.  Because many of us are scrambling to balance being professionals, parents, caregivers, cooks and housekeepers simultaneously, I will keep my message short and actionable.

What I have not heard much discussion about is the need to pay attention to the notice provisions in contracts; provisions that are generally viewed as “boilerplate” and not worthy of much focus.  While one can hope the opposing party does the “Right” thing in these times, there will be those who may see the current global emergency as an opportunity to take advantage of the other party, by sending technically accurate and contractually compliant notices by mail or fax to offices that may be empty.  Even though many notice provisions allow for email notice, those are almost always a permissible means of notice; not a mandatory means of notice.  So assume that due to the crises, a payment is not made or is late, a deadline is missed, or some other breach occurs.  The other party, thinking they can take advantage of the situation, sends the notice of non-compliance or breach by regular mail, FedEx, or by facsimile.  People are working from home, so the notice is not seen.  The cure period runs and now the breach has become a default, entitling the other party to pursue its contractual remedies.  While one can hope that the Courts would take a dim view of this behavior, as we all know, “hope is not a plan.”  So, the action items would be:

  1. If legally permissible in your area, make sure someone is going to the office every day to check the physical mail, courier deliveries and incoming fax (if your system does not have fax delivered as a pdf attachment in an email).

 

  1. Consider sending every contracting party you can think of a notice (including by email, even if the notice provisions do not call for email), to change the notice address to the address of a responsible person in your organization who can physically receive notices. If there is a problem later, you want to be able to demonstrate to a Court or arbitrator that you made every reasonable effort and acted in good faith to inform the other party of the means to provide notice during this global emergency.

 

  1. Seek to engage the other party to amend the notice provision to require mandatory copies of all notices by email in addition to whatever other method of transmitting notice is specified.

My best wishes for good health in these difficult times.

Jonathan Minnen

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