Recent updates to the City of San Antonio website provide excellent information for small businesses:
As a small business owner, you may be finding that COVID-19 and its effects present unprecedented issues with contract compliance. In considering a party’s performance under a contract, there may be several clauses built into your agreements that might be invoked to assist your small business.
Consider having an insurance specialist review your insurance policies – Your agreement may require that you carry business interruption insurance or other coverages that may apply to the presence of COVID-19. Review your policy for language about communicable or infectious diseases, or conversely, exclusions related to virus-related losses. It is best, if possible, to have an independent third party review the policy, rather than your broker or insurance company.
Consider sitting back down at the table – You and the other party to the agreement may be able to discuss whether there are alternative means to perform contractual obligations. The other party may be amenable to adjust performance under the circumstances, including extended deadlines or partial performance of obligations.
Review your agreement for force majeure clauses. For more information, see a recent Law Blog from Aric J. Garza Law PLLC relating to such clauses. Note that contractual clauses can be interpreted differently, so it is important to discuss your situation with an attorney, whether you are seeking to enforce or excuse performance under your contract.
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On March 17, 2020, Texas Governor Greg Abbott instructed the Texas Workforce Commission to waive the waiting week for Unemployment Benefits. In addition to waiving the waiting week, the Texas Workforce Commission is exercising its authority under the Governor’s declaration of a Statewide Disaster to waive Unemployment Insurance work search requirements effective immediately.
Those seeking to apply for Unemployment Benefits will need to submit an application.
You will need the following:
- Last employer’s business name and address
- First and last dates (month, day and year) you worked for your last employer
- Number of hours worked and pay rate if you worked this week (including Sunday)
- Information related to your normal wage
- Alien Registration Number (if not a U.S. citizen or national)
For Additional Services in San Antonio: https://www.workforcesolutionsalamo.org/
COVID-19 has brought about many horrible scenarios relating to public health and serious financial stress on our incredibly complicated financial system. But small businesses are confronting a specific issue–can COVID-19 excuse small businesses or individuals from their contractual obligations?
The answer depends on the language contained in the contract, local and state law (including Emergency Orders/Directives from governors and/or mayors), and the connection between COVID-19 and the parties’ ability to perform their contractual obligations.
Many contracts contain a “Force Majeure” clause or an “Acts of God” provision. These provisions apply when a contract cannot be performed due to causes which are outside the control of the parties and could not be avoided by exercise of due care. These clauses allocate risk between the parties when an unanticipated event makes performance impossible or impracticable for each party or both parties.
Also, the more specific the clause, the more limited application it has. Most clauses specify that they are only invoked when performance becomes impossible.
Courts generally require the party claiming force majeure to show that the event was not foreseeable and directly caused the failure to meet its contractual obligations. Thus, a pandemic resulting in mass closures of all restaurants, bars, schools and the like should not be a close call. This is not a normal risk of doing business.
Note that many contracts have specific requirements in order to trigger the “Force Majeure” clause or “Acts of God” provision–namely, notice to the other party.