It is a difficult time for education providers with the Government’s Coronavirus advice and guidance changing on a daily, even hourly, basis.
Many education providers are worried about the implications for their commercial contracts, and in particular those services which rely heavily on parent or other third party payments (such as transport, catering, sports and recreation, nursery provision and wraparound care). Others may also be worried about loss of essential income streams from lettings.
Education providers understandably need clarity on their contractual rights under essential business and supply contracts, but are also mindful that they will need their suppliers when a semblance of normality resumes.
The Chancellor’s announcements have offered a potential lifeline for some suppliers, and we expect many education providers will look to vary their contracts with suppliers quickly to take into account some of these mitigation measures in a way which supports fairness and continuity for all.
While it is important to understand the scope of any rights to terminate or suspend contracts, other innovative contractual provisions might also be considered to try to help create significant social benefit in the midst of this crisis and to support everybody in powering out of it when conditions begin to improve. This position is supported by the Government which has just issued a briefing note to all contracting authorities advising them to urgently review, and if necessary amend, their contracts and put in place contingency arrangements with suppliers during this time.
If you would like to speak to us about your commercial position, please get in touch with us. We can work with you to help agree a practical solution with your suppliers, and then - importantly - to document it. Taking these steps should help to provide a more secure footing from which to deal with the current crisis and to support a return to normality once the current threats recede.