COVID 19 Notification and Contracting Guidance
Providing adequate notice is critical to protect your rights in an event such as the COVID-19 pandemic. While each situation will be different, some form of notice between contracting parties will be required. Nearly all standard contracts have some form of force majeure clause excusing performance under the contracts if the event is beyond the control of the parties. However, most clauses of this nature are typically not labeled as “Force Majeure” but are instead provisions dealing with delays in general. Given that many contracts provide very short notice periods (such as “immediately”, or “within 24 or 48 hours of the event”), the suggested notices provided below are designed to give immediate notice without the need for a thorough analysis of your contract. These notices should be followed by a careful review of your contract and the providing of such other notices and information as is found to be required.
These suggested notices are generic and should be customized where necessary. McAlpine PC is available to assist should the need arise.
Standard COVID 19 Upstream Notice
Re: [ Project name]
COVID-19 IMPACT NOTICE
Please be advised that our scope of work on this Project will be impacted by the various unprecedented, unforeseeable, and unavoidable government actions being implemented due to the ongoing COVID-19 pandemic. In an effort to provide this Notice as quickly as possible, we have not yet fully evaluated the applicable provisions of our contract but will do so as soon as time permits. If you believe that any further actions, notices or information must be provided, please notify us immediately and we will endeavor to do so in accordance with our contract. We will endeavor to track and document all costs associated with this occurrence and will undertake to mitigate the impacts wherever possible.
We consider this event to be compensable under our contract as well as sufficient justification for an appropriate extension of the time for our performance. Please notify us immediately of any actions you intend to take in response to this situation which may affect our contract scope.
Standard Downstream (subcontractor/supplier) COVID-19 Notice
Re: [ Project name ]
COVID-19 IMPACT NOTICE
We are aware that there may be potential impacts affecting this Project associated with the current COVID-19 virus. We intend to provide whatever notices are required by the Prime Contract, including any that may relate to your work. In order to do so, we require that you timely notify us of any impacts associated with this event which actually affect your work with sufficient detail that we may comply with our notification obligations under the Prime Contract. We make no representations of any kind as to whether any such claim would be compensable under the applicable contracts nor do we take on any responsibility with respect to such claims not already imposed by the Subcontract. Failure to comply with the applicable notice provisions may result in a waiver of all claims.
We remind you that you have an obligation to mitigate any impacts you claim. As such, please provide us with your mitigation plan, including a recovery schedule, as soon as possible, but not later than 10 days from the date of this letter. Your mitigation obligations include providing appropriate notice to insurance carriers, sureties, and others for the benefit of the Project and Contractor. We also require that you immediately notify us of any further developments affecting your work as circumstances change.
We provide this notification with a full reservation of our rights under the Subcontract.
We have reviewed the State of Michigan Executive Order 2020-21 concerning the current COVID-19 pandemic in conjunction with the scope of work on the [INSERT PROJECT NAME] project and have determined that under Sections 8 and 9.b.1, [INSERT COMPANY NAME] is not considered a business that employs “Critical Infrastructure Workers.” As such, we intend to close down our current job sites for the [INSERT PROJECT NAME] project and return upon the expiration of the Executive Order or in accordance with future Executive Orders. If however, you believe that [INSERT COMPANY’S NAME]’s work on the [INSERT PROJECT NAME] project site is in fact “critical,” as defined by the Executive Order, please notify us in writing explaining that you have determined that the work is critical and explain the reasons supporting the designation. Upon receipt, we will evaluate your designation and respond accordingly.
You may locate the above-referenced Order here: https://www.michigan.gov/whitmer/0,9309,7-387-90499_90705-522626--,00.html.
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