Issues During COVID-19: Construction Companies
It seems no industry is immune to the effects of COVID -19. One industry feeling tremendous impact is the construction industry. From social distancing, loss of business and shutdowns there are a host of challenges facing the sector.
Employee Health and Safety For businesses able to continue operations, updating health and safety policies will be important. This will protect not only the business from potential liability, but also employees and should address safety measures, PPE and procedures for employees showing symptoms.
Impact on Contractual Relationships Force Majeure- The COVID-19 pandemic may be viewed as a valid force majeure. This unforeseeable event, not at the fault of either party, can make performance impossible. You should review your contracts for the verbiage of these provisions and be mindful if they apply.
Project Delays- It is very likely that the pandemic will cause delays in project timelines. You may need to amend contract language to address these delays. Early communication and working together though this difficult time will make the process easier for everyone.
Revenues and Financing The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides resources to qualified businesses to pay debts, ongoing costs, and payroll. This program is evolving and may not capture all the losses incurred. Damages for delay or frustration of purpose may need to be addressed between parties. Payment and draw agreements may need to be modified, when appropriate, to accommodate for changes or lulls in work.
New Contracts and Negotiations The pandemic will also impact how new contracts are negotiated. New contingencies and mechanisms for risk mitigation should be part of new contracts – there are no guarantees of when we return to full operations or what that will look like.
COVID-19 has impacts for all industries. If you have questions and concerns about navigating the new normal, contact the experienced attorneys at Kendrick Law Group for a consultation to help you navigate in times of uncertainty.
Co-written by Spenser Nampon, law clerk
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