In 2020 the court rules were changed to require that all residential tenants must be given 14 days’ notice of an eviction. What happens though if the eviction is cancelled on the day?
It is perhaps a measure of these unusual times that the UK Government has published guidance that essentially asks business to “play nicely”.
The Cabinet Office has published guidance asking individuals, businesses (including funders) and public authorities to act responsibly and fairly and “in the national interest” in performing and enforcing their contracts.
The guidance asks parties to contracts to support the individual personal responses to Covid-19 and protect jobs and the economy by engaging in “responsible and fair behaviour”, whilst the Government faces criticism that its own financial support schemes are an “implicit bail-out for banks and landlords” and failing to protect those on the frontline.
What does responsible contractual behaviour look like?
The Government gives explicit examples of areas contracting parties are asked to improve, including:
- fulfilling your obligations as best you can in the circumstances and maintaining cashflow by paying invoices promptly;
- minimising disputes and being flexible where performance is reduced or delayed but still effective;
- returning deposits or part payments and not punishing another party for circumstances beyond their control;
- protecting effective supply chains and market structure even if there are temporary weaknesses due to insolvency;
- keeping accurate records and sharing information without delay;
- doing business in a way which is sustainable in the long-term to enable economic recovery after the Covid-19 outbreak.
These suggestions will come as no surprise to organisations who have already invested in their commercial relationships. Supply chains thrive where contracts fairly apportion risk and reward collaborative working; contracts are a key tool in establishing those expectations at the outset.
What is unusual is the suggestion that the Government will “review behaviours in contracting, including public sector procurement, performance, prompt payment and contract management arrangements”. Whilst market behaviour can be scrutinised by the Competition and Markets Authority, procurement, performance, prompt payment and contract management are typically matters for the Courts.
Creating a duty of ‘good faith’?
The guidance has many similarities with the principle of ‘good faith’ (which does not automatically apply to contracts in England and Wales) where the parties can act in their own self-interests and prioritise their own commercial interests, but these must not be pursued at the expense of honesty, fair dealing and integrity. However, the guidance is not enforceable or intended to override specific guidance, procurement policy notes, legal or regulatory obligations. Instead, it is a political plea to strongly encourage good behaviour and avoid ‘bad behaviour’. The guidance doesn’t discourage parties from exercising remedies in respect of impaired performance or claiming breach of contract and enforcing events of default and termination but asks that parties act reasonably and proportionately in responding to performance issues and enforcing contracts.
Parties who fail to acknowledge the inter-dependency of their market, may find that maximising profits results in long-term damage to their economic recovery. Take financial advantage of your suppliers and you’ll soon find yourself unable to source key materials.
Objectives of responsible and fair behaviour
There are limited financial reserves available and the guidance adds to the existing difficulty of balancing the competing interests of shareholders, beneficiaries, regulators and investors. However, it is also a reminder that contractors, customers and employees are all feeling the effects of the Covid-19 outbreak. Once organisations have satisfied their own legal duties, a just and equitable approach to contract management can serve as an investment in its own economic ecosystem.
It will be interesting to observe how much appetite the Government has to rein in market practice, and whether these expectations of “responsible and fair behaviour” will be put on a more enforceable, statutory footing in the future.
We are delighted to announce that our private wealth law department has continued to maintain its Band 2 position in the latest edition of Chambers and Partners High Net Worth.
The new CHF is set to launch and open for applications with £4 million set to be allocated to community-led housing groups to support an increase the supply of affordable housing in England.
Charities, like other organisations, may be subject to or choose to voluntarily comply with the reporting requirements under the Modern Slavery Act 2015.
The draft regulations making it mandatory for anyone entering a registered care home in England to have been double vaccinated unless they are clinically exempt were made on 22 July 2021.
In the Transforming Public Procurement Green Paper, the Government signalled its desire to increase its control over procurements by all contracting authorities.
The monthly round-up from the Anthony Collins Solicitors charities team.
Legal updates as the UK enters into stage 4 of the roadmap and legal restrictions on face coverings and social distancing are lifted.
The first disability we are going to discuss is diabetes. We begin by discussing the different types of diabetes; their similarities and differences and how we live with the disability within our day.
Tim Coolican and Freya Cassia explore the legal and practical options available to providers if a disappointing result is received following an inspection.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.