Businesses and individuals are hurting financially now. When businesses do reopen, things will not be “normal”.
This has left a lot of businesses, especially small ones, wondering if they can fulfill their contractual business obligations.
This is why you, as a business owner, need to review all of your obligations and know your rights.
Typical contracts that a small business may be involved in include a lease, storage unit contract, contract between the business & suppliers /service contractors, and contracts to supply customers goods or services from the business.
But, what if performance has become difficult or impossible due to current circumstances? Can you get out of the contract? Can you alter the terms? Can you get a modification of the terms?
During a high stress time it can be tempting to “hope for the best” and “just see what happens”. Sometimes, that works. But sometimes, by waiting to deal with a situation, you lose certain rights that you would have had.
For instance, many contracts state conditions that make performance impossible. The idea here is that a party cannot be expected to perform their part of the deal if it is impossible to do so through no fault of their own.
But, each contract is different. This is very important to note. Some contracts say nothing on the subject, others state very specific situations which allow a claim of impossibility of performance. Others are broadly worded.
Most contracts in the business world won’t say anything about a worldwide pandemic.
So, where does that leave us?
Again, all contracts are different. That bears repeating because it is so true, and because it is dangerous for you, as a business owner, to read this blog or any blog and make assumptions.
In addition to paying attention to the specific language of the contract, and dealing with how that language applies to a situation that no one expected, you may also have certain time limits to act and certain ways that notice needs to be given to the other party. If that is not properly followed, you could lose some rights that you have.
You may be a business owner trying to do your best who is worried you won’t be able to perform your obligations. Or you may be counting on a supplier, contractor, or other party to provide essentials to you. Or both. Either way, it is worth a review of your contracts so that you understand your rights and obligations.
Having an attorney help you see your options is valuable and can save you money later on. This is an evolving situation. We don’t know exactly how things will play out. Having knowledge and a plan can make all the difference in your future.
We are currently offering a free consult for Texas business owners. We can guide you.