Devant Inner Circle Legal Update
Welcome to the last newsletter of the year! And what a year it’s been 🙂 This month we look at what we can take away from the rollercoaster of events of the last nine months. As always, do get in touch if you have any questions or comments about the content. Feel free to share this article within your company and if you have any suggestions for next month’s legal update let me know. Thanks again for being part of the Devant Inner Circle.
CEO Devant Limited
Expecting the Unexpected
As we reach the end (at last!) of a year in which the unimaginable has become mundane, I’m sure I’m not alone in cautiously looking forward to a more positive 2021.
This year has seen massive shifts in working habits, dramatically increased rollout of digital tools to facilitate home working, and changes in more or less every area of our business and domestic lives.
From a contractual perspective, we’ve scrutinised more ‘force majeure’ clauses in 2020 than ever before. Understanding what is, and what isn’t, ‘beyond a party’s reasonable control’ has become a matter of key commercial importance for many of our clients this year. In some cases, it’s been the difference between staying afloat and not.
So what can we take away from this annus horribilis?
Firstly, that unthinkable things do, occasionally, happen. So when we’re drafting and negotiating relationships with others, we should perhaps give more thought to the ‘what ifs’. As you’ll know, I’m not a fan of including lots of ‘belt and braces’ contract terms, “just in case”. Generally, we’d rather focus on terms that are really necessary to keep you and your business safe, and keep the legalese to a minimum. But this year has been a lesson in what happens when those extremely unlikely events actually occur.
Second, that we’re often far more resilient than we give ourselves credit for. The Devant team relocated to our homes, moved our telephony online, implemented daily Zoom team meetings and optimised home workstations in the first couple of weeks of lockdown. I’m sure you’ll have had similar experiences. Even when really crazy stuff happens, the world (largely) keeps turning.
When we look at risk assessments, we generally consider two factors: probability (how likely it is that the risk event will happen), and impact (how expensive/painful it will be if it does). Because of this, you might decide that it’s ok to accept a potentially very painful/expensive clause, since the probability of it ever coming into action is so tiny and remote. Or that, given everything you’ve survived this year, even massive crises are less scary than they might have been.
Your experiences of 2020 might encourage you to consider some different approaches:
- Taking a more risk-averse attitude to contracting, refusing to accept those ‘long shot’ risks at all
- Becoming less risk-averse, figuring that you can weather any storm that’s thrown at you!
- Reviewing your insurance, to see whether you can pass more of your business risk on to your insurers (and whether the peace of mind justifies the extra cost)
- Building in ‘escape routes’ so that if something truly dreadful and unprecedented happens, you can exit potentially painful contracts (or, worst case, consider winding up the business and starting again!)
When considering how the events of this year might change your approach to contracting in the next, and coming, years, think too about the part your contracts have played in your successes and failures.
Some of our clients have found that their customers, suppliers and partners have stepped up to heed the Government’s (somewhat desperate) plea early on in the Coronavirus pandemic, to ‘play nicely’. Even though their contracts gave them rights to cause significant pain, they’ve held off enforcing those rights in the face of the massive difficulties businesses have faced. If you’ve found yourself in this position, you might feel that what’s in the contract document is less important than the relationships you build – maybe Karma matters more than contract?
Others, who’ve had customers combing through their agreements looking for ‘get out’ options, will have a more cynical attitude to contracting in 2021. They’ll be making sure their agreements cover as many of the ‘known unknowns’ as possible.
And you? What does 2021 look like for you? What lessons will you take forward? Whatever happens, the Devant team will be here to support you, answer your contract-related questions, and guide you through the commercial minefields. With a new BREXIT agreement to digest, continuing COVID-19 challenges to navigate, and a continually evolving technical and business environment, there’ll be plenty to keep us all busy.
Please make the most of your Inner Circle membership in 2021. Use us to bounce ideas off, explore options, discuss commercial strategy, assess risks and opportunities – we’re here to help you survive, thrive and grow, whatever the world throws at you.
On behalf of all of us at Devant, I wish you a happy, healthy and successful 2021.