Blog 010 - The COVID19 Puncture Repair Kit

Everyone’s talking about it… Coronavirus… the second wave…. But seriously, have you changed your standard terms and conditions to include a provision for what will happen in the event of a repeat or similar scenario. For many existing contracts, there will likely be cover under the unknown and unknowable clauses in the contract, but what about new contracts? It is in the news on a daily basis, the talk of the “second wave”, therefore, it could be said that a second wave was a known and probable occurrence at the start of any new contracts you might enter into at the moment.

Whilst the contract provisions of delays and production slowdowns due to coronavirus have yet to be truly tested in a formal dispute and court, most people are operating on a basis of awarding Specialist Contractors an extension of time to complete the works, but with no additional costs. If a new wave of the virus were to surface and it was on a contract entered into since, say March 2020, then the coronavirus is no longer unknown or unknowable, and you risk not being covered but any Employer that chooses not to act reasonably.

It is imperative that all new contracts have a COVID-19 and other pandemic related matters clause adding to the terms and conditions. My recommendation, in the interest of fairness, is for a time relief without costs provision, but everyone is free to negotiate their own terms.

Making a contractual provision for this cannot be overstated. Bellway have been the first major player to show their hand by requesting 5% discounts from all their Specialist Contractors because the cost of the builds have gone up… this concept blows my mind, yes the builds may be taking a little bit longer due to either temporary shutdowns of sites or slower production with changed methods of working (social distancing), but the costs of these measures have mainly been worn by the Specialist Contractors, how could they possibly afford to then provide a 5% discount. On top of this, Bellway have announced job cuts, a strong indication that they will be reducing output, which doesn’t incentivise the discounting Specialist Contractors with the idea that the discounts will allow them to “keep working” through the pending tough times.

This really highlights the importance of ensuring you have a fair contract. If anyone were to question why you want a coronavirus clause put into your contract, I don’t think its unreasonable to explain that there is a known possibility of a second wave and this a good way to draw a line around what will happen in the event of a second wave. It will protect both of you. Specialists can’t afford to lose work by pricing for the possibility of a second wave and Employers cant afford to risk total destruction of the supply chain by leveraging late completion charges on the Specialists if works do slow down during any potential second wave.

As the Tier One’s prepare their businesses to weather the storms, Specialists must do the same. Including a COVID-19 clause in new contracts isn’t so much as a life boat, but a puncture repair kit. If you have to use it you’re already in trouble, but it might just save your business.

If you want to know more about how a second wave might affect your contracts or you want to discuss wording to include in your terms conditions, drop me an email.