Managing The Unforeseen ' Is There A Duty To Cooperate?

• Published date: 06 August 2020
• Law Firm: Quadrant Chambers
• Author: Mr Nigel Cooper

The current pandemic emphasises just how unforeseen events can interfere with contractual arrangements, particularly longterm ones. It is therefore no surprise that there has been a considerable focus on the application of force majeure clauses and the doctrine of frustration.

Many contracts also contain provisions, which permit termination for convenience or on the happening of defined events (such as insolvency) or which may permit one party to suspend performance or structure performance in a way which reduces or postpones that party's financial liabilities. Clearly, while not originally intended as a means of dealing with the current situation, such clauses may provide another route to manage financial exposure or escape from a contract.

But is it possible to prevent a party using express contractual rights to its advantage and to the disadvantage of the other party in situations, which were not foreseen or which are not what the clauses were intended for?

The law will recognise an implied term that neither party will...