The coronavirus pandemic has undoubtedly led many businesses – especially small and medium-sized enterprises and businesses that are most affected – to take unprecedented steps to survive only. For many companies, a national blockade has allowed them to review all their contracts to determine the impact of the pandemic on their trade agreements and what happens if they are unable to work as agreed. To address this need in concrete terms, the American Bar Association`s Business Law Department recently released a form of status quo and toll agreement (commented and no annotations) to help contracted companies by „freezing“ certain obligations of the parties by law until the economy stabilizes. The agreement provides for a period during which the parties agree on commitments that can be maintained and those that are terminated without the other party seeking certain remedies and proposing corrective action in the event of an infringement by the parties. While we cannot support the ABA model of agreement as a „one document for all,“ this can serve as a good starting point for a concrete intermediate basis for maintaining an existing business relationship. The different stories, facts and circumstances involved in any such relationship require the assistance of a business advisor who is sensitive to each client`s concerns, in order to prepare the form of an agreement that advances and does not prejudge the rights and remedies of his client. 1. A reference or description of the underlying relationship between the parties. 2. A statement on issues that are subject to a status quo between the parties. 3. The effective date of the status quo period, the length of that period and whether and how the period can be extended.
4. A statement on deeds (for example. B the introduction or follow-up of an action) that are prescribed during the status quo period and whether the corresponding statute of limitations are prescribed. 5. That one or more parties accept, given the status quo period, one of the ancillary limitations of their capabilities (for example. B, no operations outside of ordinary activity or governance changes). 6. A statement on reciprocal obligations during the status quo, such .B the obligation of the parties to agree to negotiate or arbitrate the contentious issues. 7.
The question of whether and to what extent relations between the parties should proceed normally and are not covered by the status quo agreement. 8. A declaration of corrective action in the event of a violation of the status quo agreement by a party. 9. Usual and customary provisions relating to the representation of the power to enter into the status quo agreement, the enforcement of the agreement electronically and/or in return, warning addresses, jurisdiction and jurisdiction in the event of a claim resulting from the breach of the status quo agreement, and whether or not legal fees may or may not be awarded to the party in power in the event of a breach of the status quo agreement. We have prepared a standard distillation agreement and an agreement on tolls that can serve as the basis for solving these problems. This would be a model for companies facing performance problems in contracts, including payments or recoveries, that could soon be overwhelming for the parties and the justice system. It contains the fundamentals that such an agreement should contain and therefore offers companies a balanced opportunity to legally freeze their trade relations while the economy stabilizes. This model of agreement is obviously not designed as legal advice or substitute for legal advice. All users are encouraged to keep the advice if possible.
There is a risk of entering into negotiations for a status quo and such an agreement must be carefully developed and documented in order to be implemented.