What does “Force Majeure” mean?
Crucially the phrase “force majeure” has no specific meaning in English law. As a result, there is scope for complex legal argument, including as to whether the effects of the coronavirus outbreak can amount to force majeure in the first place. If the coronavirus crisis deepens, force majeure provisions could become relevant in the following ways:
- suppliers to your business might seek to invoke force majeure
- you may need to invoke force majeure under your own contracts
Each of these will need careful analysis of the relevant contract against the applicable factual background. Unfortunately, the position is unlikely to be clear cut.
Related FAQs
We hope that all organisations will come out of lockdown successfully. However, the current economic crisis means that many organisations will face very difficult trading conditions.
Employment costs are one of, if not the, largest cost to your organisation. These costs will have an effect on your financial well-being – and many organisations are now considering how to reduce employment costs. That said, your workforce is also your most important asset and as we get back to business, you will need your workforce to run the organisation, produce your goods, deliver your services and deal with your customers.
As a result, many organisations are facing a very difficult situation – how to reduce or flex the cost of the workforce whilst also maintaining an ability to service customers. This difficulty is enhanced by the uncertainty of when the pandemic will be controlled and the threat of lockdowns end.
- A taxable grant worth 80% of the average monthly profit over the last three years (one or two years will be reviewed for those who do not have three years of tax returns)
- The grant will be capped at £2,500 per month
- The scheme was initially available for three months and has been extended as necessary
- Individuals claiming a grant can continue to do business (unlike employees who must not work when furloughed)
No. No action need be taken in relation to the demand but we would advise against presentation of a petition based upon any Statutory Demand issued between 1 March 2020 and the end of the restrictions. As you may be aware, with Winding Up there is no requirement to issue a Statutory Demand notice before proceeding so this is unlikely to create too many issues – click here to see whether you should issue petitions on other grounds.
There is nothing to prevent statutory demands being served at this time. However, there may be limited benefit as it cannot form the basis of a future winding up petition.
If you have obtained a Grant of Probate or Grant of Letters of Administration there should be no need to complete an indemnity, merely an account closure form. If however you have not yet obtained a Grant but the bank is willing to release funds then they will generally require an indemnity to be executed. Several banks and building societies including Barclays, Lloyds, HSBC and Santander have signed up to the British Banking Association’s voluntary Bereavement Principles, one of which is to support the bereaved according to their personal needs and work with you to resolve everything as quickly as possible.
If the indemnity requires a solicitor to act as a witness, you should contact the bank to see what they are willing to do to get around the problem, given the current situation.
Companies House guidance on the impact of coronavirus on their services can be found at: https://www.gov.uk/guidance/coronavirus-guidance-for-companies-house-customers-employees-and-suppliers
This flexibility offered by Companies House could be a useful short-term help to businesses that are struggling to deal with the impact of the Covid-19 outbreak, but be sure to take action in advance of your filing deadline.