The COVID-19 pandemic has created a seismic shift for businesses. All types of legal contracts now should be drafted with the pandemic in mind.
For example, in business acquisitions or asset purchases, extreme care should be taken if a party has COVID-19 loans or grants. Otherwise the sale could trigger an unintended default. Purchase agreements now should anticipate the risk of workforce infection, as well as the impact of voluntary or mandatory shutdowns, both of the business and of suppliers and customers. Often overlooked are Material Adverse Change and Force Majeure clauses, which could allow parties to be excused from performance when extreme and unlikely events occur. Epidemics now should be addressed in those clauses, and other remedies, such as delayed performance, should be considered. Now more than ever, businesses need to consult with an experienced attorney before signing important contracts.