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Cabinet Office underlines need for constructive contractual behaviour

11 May 2020

Government has stated what it expects from construction businesses as they manage and enforce B2B contracts during the ongoing COVID-19 emergency. New guidance from the Cabinet Office clarifies what Government expects of parties to contracts impacted by the COVID-19 emergency, saying that the parties should act “responsibly and fairly, support the response to COVID-19 and protect jobs and the economy”. The guidance aims to address wide concern that the industry could become embroiled in costly and lengthy contractual disputes over the effects of the pandemic on projects and other commercial activity, without collaborative discussions to resolve the issues.

The 5-page Cabinet Office guidance says that “Responsible and fair behaviour is strongly encouraged in performing and enforcing contracts where there has been a material impact from Covid-19. This includes being reasonable and proportionate in responding to performance issues and enforcing contracts (including dealing with any disputes), acting in a spirit of cooperation and aiming to achieve practical, just and equitable contractual outcomes, having regard to the impact on the other party (or parties), the availability of financial resources, the protection of public health and the national interest”. Numerous contractual and associated provisions where “responsible and fair behaviour” is expected are detailed in the guidance, which adds that further measures may be considered if the note does not achieve its aim.
The full statement from the Cabinet Office is here. ​​​​​​

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