CONSIDERATIONS IN SERVICE PROVIDER CONTRACTS DURING THE COVID-19 CRISIS

Covid19 Blog Post William Anger

April 6, 2020

In the context of many contracts for services, potential exposure to the Coronavirus must be on the mind of both the service provider and the recipient of the services / customer.  The parties must consider liability allocation between one another, and, in addition, possible liabilities that could flow to third parties related to the provided services.

In light of the risks, the service provider and customer should carefully consider allocating risks at the inception of the contract, by included provisions for requirements and/or limitations as follows:

  • Holding one party or each other harmless and agreeing to indemnification provisions for liabilities/damages relating to the Coronavirus;
  • Disclaiming of warranties by service provider;
  • Requiring customer to deep clean area where services are to be performed;
  • If services require entering customer’s premises, requiring customer to provide premises in accordance with CDC guidelines related to the Coronavirus, such as ensuring social distancing when services are being performed;
  • Acknowledging that that premises where services being performed will not be made virus free;
  • Requiring that the Service Provider perform its duties in accordance with  CDC guidelines related to the Coronavirus;
  • Suspending obligations under the Agreement if Coronavirus makes it impossible or impractical to perform services;
  • Allowing either party to terminate the contract if their ability to perform the services or otherwise fulfill contractual obligations is or will be delayed for a prolonged time-period; and
  • Addressing other specific concerns or potential liabilities depending on the type and nature of the services being performed.

The Parties to a service contract also should examine any applicable insurance policies related to the services or the Premises where the services are to be performed, to determine if losses resulting from the Coronavirus are a covered risk.  However, it is common for insurance policies to exclude coverage for losses resulting from disease or pandemics.

About the Author: Bill Anger assists clients in structuring business, real estate, loan and water rights transactions. He also represents business and public clients as an advocate in litigation and appeals. Utilizing his more than 37 years of experience on both the buyer and the seller side of deals, Bill guides clients in structuring transactions that withstand the test of time. wha@eblawyers.com | 602.222.4972

Disclaimer: This article is not legal advice and is only for general, non-specific informational purposes. It is not intended to cover all the issues related to the topic discussed. If you have a legal matter, the specific facts that apply to you may require legal knowledge not addressed by this article. If you need legal advice, consult with a lawyer.