In the early 1980s, a book entitled You Can Negotiate Anything spent nine months on the New York Times bestseller list. The book may have a resurgence in the coming months, as one thing is for certain right now: After the state’s reopening, every contract, lease, and agreement is likely to be subject to negotiation. While much attention has been focused on force majeure provisions in contracts and potential bankruptcy filings, the practical effect of survival of the fittest will dictate necessary legal needs.
Certainly there will be a time lag for the courts to be clogged with new cases. The retail, leisure travel, and entertainment sectors, while arguably most impacted by the recent closures and restrictions, will surely not be the only areas where businesses and individuals by necessity will renegotiate virtually every existing agreement.
As New Jersey deals with the enormity of the COVID-19 pandemic, legal issues are emerging that were previously never contemplated. In an instant, the world has changed, and all negotiated contracts are potentially at risk. The question becomes: How do businesses protect their futures? To start, anticipate legal issues.
Documents and Agreements Likely to Be Subject to Renegotiation
It is prudent to develop a reopening legal plan consisting of the following steps:
- Review your existing agreements. Are they still beneficial, or have things changed?
- Anticipate requests to modify current agreements or to be relieved of existing obligations. Stay ahead of and, as much as possible, proactively address such asks.
- Keep in mind that COVID-19 agreement amendments may need to be qualified as temporary in nature.
- Establish policies on employment issues.
- Review leases for necessary space and price. Have your needs changed due to remote work arrangements?
- Review banking relationships and credit agreements.
No doubt lawyers and clients will be more aggressive and take “tougher” positions to survive and protect their legal positions. Similarly, an issue that was emergent before the crisis may no longer be an emergency, unless it involves health and safety or job protection.
Aside from the legal issues, the business community and the legal profession have the opportunity to truly assist companies, individuals, and those in need in this time of crisis. This kind of assistance is part of this firm’s DNA.