Commercial Agreements

When seeking to terminate a contract care needs to be taken to avoid finding yourself in breach instead, as this could affect your entitlement to damages. There is a well-established rule in English law that if X terminates a contract with Y for a flawed reason but later discovers there was a better reason  (even though X did not know it at the time) then X can rely on the later better reason to justify the termination (i.e. the terminating party can rely on any grounds which were available to it at the time it gave notice to terminate even though it did not yet know about them or mention such reasons in its termination notice).

Contracts usually contain future or ongoing performance obligations that could be affected by problems with business continuity  - such as terrorism, natural disasters or traffic nightmares caused by the Olympic Games.  Under English law a party that is unwilling or unable to perform its obligations as a result would be in breach of contract, giving the other party a right to terminate the contract and/or seek damages. So, what can you do to minimise these risks or otherwise, what legal remedies do you have?

This briefing note sets out what the legal implications of business interruptions are and provides practical steps for consideration, particularly in light of the Olympic Games and Paralympic Games this year and other high profile matters.