Coronavirus - Government measures in key jurisdictions - Flipbook - Page 60
Jersey
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Insolvency
•
Consideration is being given by the Jersey government to the relaxation of Jersey’s
wrongful trading rules. As yet nothing has been published to indicate what the revised
rules would look like. Jersey’s existing wrongful trading rules are more relaxed than
the UK in any event. Once a director concludes (or should have concluded) that there
was no reasonable prospect of the company avoiding a declaration of bankruptcy or
an insolvent winding up, the director has a duty to take reasonable steps with a view
to minimising the potential loss to the company’s creditors (failing which the director
may be made personally liable for the company’s debts). In the UK the equivalent test
is that the director must take every step with a view to minimising the potential loss to
the company’s creditors.
Contractual
Issues
•
The Jersey government has not introduced any legislative measures to deal
specifically with contractual issues caused by the COVID-19 pandemic. Any
contractual concerns will be dealt with according to Jersey contract law.
What measures
have been taken
to reinforce
contracts?
•
The main contractual provision which governs the enforceability of a contract upon
the existence of an unforeseen event is the force majeure clause. In general terms, the
force majeure clause seeks to list the situations in which the parties to a contract may
suspend or terminate the contractual relationship due to the occurrence of certain
events that are outside the control of the parties.
•
Depending on the construction of the force majeure clause in individual contracts, the
COVID-19 pandemic may cause the contract to be suspended or terminated.
•
It is also possible that in certain situations the occurrence of the COVID-19
pandemic may have the effect of rendering a contract “frustrated” i.e. the changes
in circumstances caused by the coronavirus pandemic has rendered the obligations
under the contract impossible to perform.
•
Businesses should review their existing contractual relationships and seek legal
advice to ensure they are aware and fully understand their ongoing legal obligations
and identify any areas of uncertainty.
•
Mourant has set out some of the contractual issues that arise from COVID-19 in Jersey
in this article.
Has the
government made
any changes
to insolvency
legislation?
Government measures in key jurisdictions
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