By Janelle M. Lewis, Attorney, Business & Legal Strategic Consultant

In this time of intense stress and certainty, the idea of thinking strategically about your business might seem like the least important thing to do. This is especially true when making sure that you have a business when the pandemic ends is keeping you up at time (all with all the other stresses of this pandemic). However, rethinking your strategy, or even developing a new strategy might prove to be a therapeutic exercise that creates a sound mind to decide the next steps for your business.

…rethinking your strategy, or even developing a new strategy might prove to be a therapeutic exercise that creates a sound mind to decide the next steps for your business.

A Halted Economy Does Not Necessarily Halt Your Business Contractual Obligations

The truth is, while Covid-19 has caused a global economic slowdown shutting down economies, business obligations still exist. Contractual, parties to an agreement are still expected to perform.  Under New York law,  for example, the parties intent at the time of drafting the commercial contract guides the court’s interpretation of the commercial contract. Therefore, for the most part, if the parties did not anticipate an epidemic at the time of drafting their contract, then the Covid-19 might now be able to be used as an excuse for non-performance. If the contract fails to have a force majeure clause, then it cannot be raised as a defense.

The truth is, while Covid-19 has caused a global economic slowdown shutting down economies, business obligations still exist.

Rethinking or Developing a New Business Strategy With an Eye on Your Legal Obligations

So what does this mean for contractual obligations? If a business were forced to cease activities, can they choose not receive and/or not supply a contracted product or service, despite having a contract? What was the reason, and will that reason be protected under law? What are the penalties for failing to perform? These questions and more are certainly enough to keep you up at night (again, in addition to everything going on). Rethinking your business strategy, and specifically, your legal obligations within your business strategy could prove helpful, and in some ways therapeutic, because after rethinking or developing your new strategy, you will have more concrete information to work with. Good or bad, you will know what you are up against, and have a greater ability to make informed decisions for your business both during and after this crisis.

Rethinking your business strategy, and specifically, your legal obligations within your business strategy could prove helpful, and in some ways therapeutic, because after rethinking or developing your new strategy, you will have more concrete information to work with.

Start With Your Commercial Contracts

One place to start is with your commercial contracts because they are the private laws that guide your business relationships. Proactively, commercial contracts support your business’ capabilities to bring products/services to market. Reactively, they can be used as a tool used to penalize, protect, and/or make whole again, all of which has an impact on both the economic and accounting profits of your business. Going over your contracts allows you to objectively (and honestly) assess your responsibilities alongside your capabilities.

Going over your contracts allows you to objectively (and honestly) assess your responsibilities alongside your capabilities.

Address Contractual Uncertainties Through Scenario Planning 

From this standpoint, you will see what options you have and you can begin to strategize about your next steps. In other words, you begin addressing the contractual uncertainties surrounding your business amidst the Covid-19 crisis by engaging in scenario planning to rethink or develop your business strategy.  Strategizing about how you will address your contractual obligations; or how you will respond to what other parties do (or don’t do contractual) will give you a sense of control in a chaotic and surreal situation.

bringing innovation to the law banner_LinkedINFrom this standpoint, you will see what options you have and you can begin to strategize about your next steps. In other words, you begin addressing the contractual uncertainties surrounding your business amidst the Covid-19 crisis by engaging in scenario planning to rethink or develop your business strategy.