The UK Cabinet Office has published guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the COVID-19 emergency (the 'Guidance'). It calls for a concerted effort to act “reasonably and fairly” in enforcing contracts materially affected by COVID-19.

The Guidance calls for a “spirit of co-operation” between parties in enforcing contracts. It appeals to parties to act with consideration "for their collective benefit and for the long-term benefit of the UK economy". This is unusual because it introduces a concept similar to acting 'in good faith' into considerations of contractual enforcement.

The Guidance states explicitly that it does not override specific contract terms. However, it gives us a non-exhaustive list of examples where responsible and fair behaviour should be observed:

  • requesting or making payments;
  • responding to force majeure or frustration claims;
  • exercising remedies in respect of impaired performance;
  • calling up securities;
  • initiating or continuing an insolvency process;
  • claiming breach of contract and enforcing default/termination provisions;
  • commencing court proceedings and enforcing judgments.

The Guidance isn’t binding, so an over-enthusiastic party will not feel any effect of the law. However, it might be opening itself up to both adverse publicity and negative comment from a Court.

For advice on how to deal with contract disputes during COVID-19 please contact Jeff Lewis in our Litigation Team.