The global COVID-19 outbreak has rocked the financial sector and questioned how to do business. However, our team believes that the long-term prospects for funding the funds remain promising.
Special attention to contracts should be paid. Our company’s legal professionals provide advice on legal grounds for revising the terms of the contract amid uncertainty.
Electronic signatures
Any official document (agreement, contract, agreement), printed on paper, the parties sign with their own hands with the usual stroke of the pen. But in modern realities, companies are massively abandoning paper workflow, replacing it with digital. Business papers of this format are digitally signed (DS).
During the quarantine period, signing important documents using DS is an ideal alternative to in-person meetings. Now you can sign business papers without your personal presence in the office, i.e. remotely.
DS is a digital file used to identify an individual. In encrypted form, this file contains the following data: date of birth, name, e-mail address, ID number. Sometimes a mobile phone number. The purpose of the file (key) is to identify a specific person, to confirm the possibility of signing this or that electronic document. So DS is the digital equivalent of our regular signature.
Due to the high degree of information security, DS is difficult to forge, and most importantly, the digital signature is legally binding. Since 2000, the practice of digital signatures in the United States has been regulated by a special law, ESIGN. In Europe, the eIDAS Regulation is in force, and in the UK the UETA Act, which has been adopted in another 46 states.
The choice of technology or app is up to each business individually. The most important consideration is to ensure that safe technology is used.
If you have any questions regarding the legality of the use of electronic contracts and signatures in a particular situation, we advise you to order a consultation on remedies for contractual obligations during a pandemic.
Contractual terms
Legal documents are filled with deadlines, from payment dates to notice periods, from consent periods to grace periods. If, in the context of COVID-19, there is a need to suspend business activities indefinitely, then market participants should assess how this situation will affect the contractual deadlines.
Parties should assess the impact of possible business interruptions on their obligations in accordance with their legal instruments. Any extension of the time during which a party can fulfill such obligations may be extended due to outages caused by the government. On the other hand, a negotiated deadline defined by days rather than working days may require discussion between the parties to avoid a breach if the closing time cannot be met during the business lockdown.
Qualified solicitors of our company provide legal advice on the impact of Covid-19 on labor relations and corporate procedures.
Force majeure provisions may also be subject to increased scrutiny. There are two main types of force majeure. The first provides for an indefinite delay in execution by a party. The second allows you to completely abandon the execution.
While these terms are rarely found in fund financing loan documents, they can be negotiated in letters from investors and account control agreements.
Management of potential violations
Funding parties should assess the impact of the pandemic on the borrower's ability to meet its obligations. Positive conditions, which require certain actions from the borrower, usually have grace periods.
If a market participant is unable to fulfill the contract due to the current pandemic, it would be wise to estimate when it can actually resume execution.
Our professional team provides consultations on the potential business risks in transactions with borrowed funds during the Covid-19 pandemic.
We also advise on legal grounds for renegotiating contractual obligations due to Covid-19.
