As businesses worldwide navigate the challenges brought on by the rapid spread of COVID-19, it is now more essential than ever that businesses be ready with solutions to address risks associated with the coronavirus outbreak.

Postponed or cancelled commercial transactions, disrupted supply chains, a decrease in corporate turnover, apprehensions over commercial viability of contracts, event cancellations and decreased consumer activity are all playing a crucial part in the markets and businesses around the globe.

With the number of cases in South Africa currently increasing, we have noted some immediate legal consequences on businesses across all industries which include, but are not limited to, the following:

1. Cancellation of commercial contracts due to challenges in meeting contractual obligations and the use of force majeure clauses, meaning unforeseeable circumstances that prevent someone from fulfilling contractual obligations.
2. The interpretation of merger and acquisition contracts due to the inclusion of “material adverse change” clauses. These clauses usually give the purchaser the right to withdraw from a commercial agreement in case of a “material adverse event” occurring between the date of signing and the date of closing.
3. Increased record keeping, protecting sensitive personal data and business continuity planning.
4. Insurance coverage queries, including liability insurance, business interruption insurance and scenarios such as event cancellation.
5. Planning and deploying crisis response plans.

It is predicted that we can expect disruption within the business sector for some time, and it is therefore advisable to consult with your attorney to help you respond to both the immediate and longer term business risks stemming from the rapid, global spread of COVID-19.