In essence, the model agreement refers to “status quo issues” and sets a “status quo period” during which the party agrees not to seek certain remedies and the party who, because of excellence, does not agree with the fact that it will not proceed with a series of non-ordinary court acts that may ultimately harm the other party. It understands that certain obligations, for example. B for partial payments or the provision of certain goods or services, may persist during the status quo period. It contains corrective measures in the event of non-violation of one of the parties. Referring to practice, the model agreement explicitly envisages the possibility of traditional or electronic execution and provides a mechanism for determining how one party should be communicated to the other party – particularly useful at a time when so many businesses are closed or managed from remote sites and not from their usual locations. If you have any questions about status quo contracts, contact Rick Sorenson firstname.lastname@example.org. Contact Dylan Denslow email@example.com. In considering the options available, it would be wise to start a debate on status quo agreements. Although termination agreements are most widely used in mergers and acquisitions, in other circumstances it is appropriate to consider the uncertain economic periods of COVID-19. This cooperation agreement does not exempt the parties from their obligations. Instead, it recognizes the economic stakes of the time and formalizes the agreement between the two companies to maintain the business relationship through the turbulence.
These agreements can avoid litigation in the event of an infringement and maintain important relationships. Groundhog Day: A crisis management problem. One of the most worrying aspects of the current official consensus on the status quo is its expected expiration at the end of 2020. No one has really indicated that the crisis will be resolved by then, nor that debt-pressed governments and a health shock would have access to new funds on acceptable terms next fall. The expiry date ensures that the same parties would meet again at the same negotiating table on the sidelines of the next IMF-World Bank G20 conclave. One way to make the next rounds of silent talks less chaotic and painful would be to offer all current creditors the opportunity to automatically prolong the impasse, provided certain agreed conditions are met. These conditions could include still sluggish health outcomes and spending, a continued decline in exports and GDP growth, all confirmed by an approved authority. If you would like more information on whether a status quo or toll contract may be useful or appropriate for your business, please contact the lawyer for Sullivan-Worcester LLP, with whom you consult regularly, or the lawyers above.
There is a risk of entering into negotiations for a status quo and such an agreement must be carefully developed and documented in order to be implemented. While the AbA agreement is not intended to replace legal advice and should be tailored to the facts and circumstances of any discrete contractual relationship, a status quo/toll agreement provides a practical business tool to help parties develop solutions before violations occur, even given current uncertainties, and provides greater security as soon as the effects of the pandemic have been eliminated.