International EMBA Brussels
International EMBA Vilnius
Yesterday we had a special BMI Webinar on Quarantine’s impact on performance of contractual obligations. Our sincere gratitude goes to guest speakers Agnė Jonaitytė, Partner at PRIMUS DERLING and Ramūnas Bičiulaitis, General manager at Danske Bank Lithuania.
Discussion based on attendees’ questions let us to consider the most important areas for business on these fragile times.
“COVID-19 is something our generation has not experienced up to now. It has extraordinary impact on people and business with expected long recovery time. The impact can only be mitigated by our joint actions to protect people and business. Nobody is left today outside the impact area. Business today like never before are accountable to the four key stakeholders: employees, customers, investors and society. By taking care of employees’ health and safety and by arranging remote work places business nowadays empowers customers to continue their life and operations under the “new normal conditions”. By keeping customers empowered we maintain society healthy to function. This keeps investors readiness to accelerate the recovery faster. We are bound, we are one society functioning under the “new normal” conditions,” General manager at Danske bank Lithuania Ramūnas Bičiulaitis said.
As well, Agnė Jonaitytė, Partner at PRIMUS DERLING shares PRIMUS DERLING review of legal measures to tackle economic challenges of coronavirus outbreak with daily update on actions & solutions. The review can be accessed here.
“COVID19 and/or quarantine does not release parties from performance of their contractual obligations. Each situation must be evaluated individually. Temporary suspension of performance could be available to the aggrieved party, if due to such measures it objectively is not able to perform the contract. In some cases, amendment of contract due to hardship or restructuring may also be available and viable option. In any event, the parties must cooperate and act in good faith, the law will not protect those who abuse it.
So main first steps should include the following (1) check the terms of you contracts; (2) evaluate whether in respect of each specific contract there are grounds for you to rely on force majeure or hardship instruments; (3) if yes – promptly inform the other party and start dialogue on how you will proceed; (4) evaluate big picture – may be situation calls for more universal approach to the situation and restructuring may be in order; (5) for severely hit businesses bankruptcy should also be considered to ensure fair treatment of all creditors; timely initiation of bankruptcy procedures is responsibility and, if overdue, may become liability of the management,” Partner at PRIMUS DERLING Agnė Jonaitytė, added.