Your Business Model Has Changed. But Have Your Key Contracts?
Nov 9, 2020
The global pandemic has changed the way we do business. Chances are that the written contracts dictating your obligations and legal liabilities have not changed to match your business’s new reality.
While it is difficult to chart a course forward in these uncertain times, there are very good reasons to revisit your legal obligations proactively now.
First and foremost, uncertainty creates “Opportunity”. It may be tricky to find the market opportunity presented by the global pandemic for your particular business, but the mere fact of the pandemic, changing circumstances and the degree of uncertainty everywhere is often all the opportunity you need to revisit your contractual obligations.
With very few exceptions, everyone is re-evaluating their business models and prospects – even the big market players. You may have had absolutely no negotiating leverage when you entered into that old agreement but now the counterparty is likely as eager for certainty as you are. Big businesses are as desperate for viable contracts as you and your small business are to survive – because their very survival depends upon it too.
We have seen suppliers more than willing to renegotiate distribution agreements and make concessions for exclusive product rights in this environment, and landlords, now more than ever, are amenable to more favorable lease terms in exchange for long-term commitments.
Although it may not feel like “opportunity” in the entrepreneurial sense of the word, a savvy business owner takes advantage of every business opportunity, and striking business deals that make sense while both parties are outcome-aligned is good business.
As with any opportunity, the window on your chance to re-negotiate your contracts will close at some point.
It may close in your favor, it may close in favor of your counterparty; or it may even be closed on both of you by outside forces beyond your control (such as new legislation or an intervening bankruptcy). But if you see an opportunity to realign your new market reality, you are wise to open negotiations and document your new agreements while your counterparties are just as interested in striking new deals.
Whether realigning your contractual obligations requires renegotiations with suppliers, customers, landlords, key employees or even a joint venture with a competitor, Rose Law Firm has the experience to help you meet your short-term priorities and your long term business goals.
Let us help you develop and implement a strategy to leverage the new market reality and to maximize your ability to take advantage of the new market opportunities.