4 Common Legal Issues Businesses Are Facing Due to COVID-19

4 Common Legal Issues Businesses Are Facing Due to COVID-19

The spread of COVID-19 continues to unfold—affecting thousands of businesses nationwide. This health crisis is having an unprecedented impact on the way we live and do business. As companies are having to cope with changes, novel legal issues are starting to arise. Our New Jersey business attorneys explain four common legal problems businesses are facing due to the COVID-19 pandemic.

#1: Breach of Contracts

In the face of COVID-19, many businesses are finding themselves unable to perform or honor the terms of their ongoing contractual commitments. When companies sign a contract, it is understood that both parties agree to the terms stated in the contract. However, the spread of COVID-19 has caused businesses to shut down, cease production, and stop services altogether. This has a trickle-down impact on vendors, suppliers, and merchants. The recent pandemic has significantly impacted the ability of businesses to continue terms that were negotiated well before COVID-19. A breach can occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all.

There are two different types of breach of contract, material and non-material breaches. Material breaches are done when the primary purpose of the contract is breached. Non-material breaches violate the terms stated in the contract but don’t invalidate the intent or main purpose of the contract.

If you are currently a party to a contract and the other party has failed to perform, you may wish to commence litigation to recover from any financial harm. Your business might be entitled to relief if it suffered damages, such as compensatory damages, punitive damages, nominal damages, or liquidated damages.

#2: Construction Litigation

As more and more construction sites begin to reopen, legal disputes are also likely to arise. Companies must carefully weigh the considerations for a project based on the contract language and particular circumstances. One of the most common disputes that arise in this arena is construction defects and contract delays. Poor workmanship and construction defects can have negative impacts on the property, causing disputes with owners, contractors, and subcontractors to arise. Significant delays in performance are also on the rise in the face of COVID-19, and this could hinder the entire schedule for all contractors and subcontractors on a project.

Payment disputes are another common pitfall of construction litigation. In the face of COVID-19, our attorneys see a spike in construction litigation. If a party is trying to change the payment agreement originally established or is no longer capable of fulfilling their payment schedule and obligations to contractors and subcontractors, legal disputes are quick to arise. Whether your business is facing construction performance delays or payment disputes, it’s vital to have an experienced construction litigation attorney on your side. Our team at M. Ross & Associates, LLC is here to help you resolve legal disputes to avoid liability.

#3: Commercial Real Estate Issues

Since COVID-19 has affected the cash flow of many businesses, tenants are finding it increasingly more difficult to maintain their lease obligations. It is anticipated that commercial lease disputes will steadily rise in the coming months due to COVID-19. This includes property management contracts, landlord-tenant disputes, property tax appeals, and more. Our attorneys are currently hard at work negotiating with landlords and business tenants in commercial lease situations to make modifications to the lease provisions that are palatable for both parties. Before taking any legal measures, it’s vital to consult with an experienced business and commercial real estate litigation attorney.

#4: Partnership & Shareholder Disputes

As COVID-19 continues to affect businesses, partnership and shareholder disputes may arise. Partnership and shareholder disputes can turn into highly complex litigation involving counterclaims and crossclaims with multiple parties and various state statutes. Whether you and your fellow shareholder are in disagreement about basic management decisions or disputes about the direction the board wants to take amidst COVID-19, you need an experienced business litigation attorney on your side.

Experienced New Jersey Business Attorney: (201) 897-4942

If your business is experiencing legal issues due to COVID-19, our team at M. Ross & Associates, LLC is here to help you. Our New Jersey business lawyers combine the polished legal sophistication that clients expect from a leading national law firm with the intimacy, personalized attention, and promptness of a small firm. We have the knowledge, skills, experience, and resources needed to help you and your company obtain the best possible results for your matter.

Contact our New Jersey business litigation attorneys today at (201) 897-4942 to schedule a virtual consultation!


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