Coronavirus - Government measures in key jurisdictions - Flipbook - Page 87
United States of America
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Contractual
Issues
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The COVID-19 pandemic has significantly affected the global supply chain. In addition
to duties, liabilities, and defences created by contract, businesses also need to be
conscious of a number of common law duties and obligations that may arise as a
result of what is happening around the globe. These can include extra-contractual
defences and concepts such as force majeure, impossibility of performance, and
frustration of purpose. Although federal courts are open, many state courts are
running with reduced capacity, so the U.S. has not seen widespread contract litigation
as of late April. However, parties are generally positioning themselves to prepare for
it. From the obligor side, this includes correspondence emphasizing how the current
crisis makes strict contractual compliance impossible. From the obligee side, this
includes careful steps to preserve rights while avoiding the implication of taking harsh
positions that could lead to adverse litigation outcomes in future.
•
For more details, please refer to our client alert here.
What measures
have been taken
to reinforce
contracts?
Property
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The impacts of COVID-19 have led many landlords and tenants to consider their
options under existing leases to determine the best path forward and what actions
to take if someone on the property has contracted the virus. As a result, many states
and local jurisdictions have taken action to prohibit certain evictions based on nonpayment of rent and to delay foreclosures by mortgage lenders. The U.S. has not yet
seen a wave of real estate related litigation, likely because court access is curtailed
and landlords may consider a non-paying tenant preferable to no tenant.
•
For more details, please refer to our client alert here.
Have any changes
been made to
the laws around
property, rent and
enforcement?
Litigation
Are the courts
operating?
Tax
Generally, yes. Federal courts are operating, and state courts are available for
emergency relief. In general, courts are deferring items that are not urgent, and also
adjusting procedures to observe social distancing guidelines.
•
The CARES Act offers some taxpayers an opportunity to take immediate action to
reduce their federal income tax liability as they prepare their 2019 income tax returns.
However, much of the CARES tax impact will be delayed until income tax returns are
filed for tax periods during the crisis, which, for most U.S. taxpayers, began in 2020.
Thus, in many cases, federal income tax refunds (particularly refunds resulting from
the carryback of net operating losses (NOLs)) will not become available until income
tax returns for 2020 are filed in 2021. Nevertheless, some action may be taken in the
short-term to accelerate the ability of taxpayers to obtain income tax refunds this year,
and some action may be taken during the balance of 2020 to ensure that income tax
refunds will be obtained when 2020 income tax returns are filed in 2021.
•
For more details, please refer to our client alert here.
Has any new
legislation been
introduced in light
of COVID-19?
Government measures in key jurisdictions
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