Welcome back to the blog series on hidden contract risk. We’ll highlight three risks and show how contract management software can help you expose and eliminate them. Last week, we highlighted the risks around data privacy. Check out the full post here if you missed it. Today’s post is all about pandemic-era contract risk. Let’s get started.
Risk Review: Pandemic-Era Contracts
As new waves of pandemic concern arrive, companies must re-evaluate performance risks in existing contracts. Not doing so is risky; predicting the follow-on effects of virus variants (and future pandemics) is just too difficult.
Popular approaches include adding “pandemic” language to force majeure clauses and modifying clauses to exclude performance impacts from government mandates. Other steps involve assessing language in cancellation agreements and revenue-related policies (like minimum notice requirements and return-of-equipment provisions).
Any revisions must span the whole portfolio. For example, overlooked contracts (or unexamined force majeure clauses) mean lingering risk. Fortunately, legal teams can fight back with AI-powered contracting solutions. These tools let leaders quickly parse, categorize, and even mark up problematic contracts. In a crisis, actionable data arrives in minutes, not days.
If you’re a legal team trying to keep up with the latest COVID-19 mandates, download this great free resource that highlights everything legal should know. To learn more about Force Majeure and other contract terms to manage during black swan events, check out this guide.
Tomorrow, we’ll dive into our third and final risk review for this series: M&A contracts and commitments. Can’t wait? Download the full eBook today.