HomeInsightsNotices provisions in leases and Covid-19

As the spread of Covid-19 continues, most businesses in the UK have already closed (or are closing) their offices, in line with governmental guidance regarding social distancing. Remote working is in many ways proving a great success, in no small part thanks to social technologies enabling communication on smart devices. Often overlooked, however, are some of the less obvious repercussions of losing access to physical locations, mail and fax machines. There’s a high risk in the current climate of notices being improperly served and thus being ineffective or, for the recipient, formal notices not being properly received and important rights of reply being lost (or deadlines being missed).

How and where must notices must be served under my contract?

Most contracts will have notice clauses setting out the permitted methods for the parties to contact each other. Even in this digital age, such clauses overwhelmingly state that notices must be served by hand or recorded delivery, to nominated addresses, with notices deemed received a certain number of days after posting or (usually) immediately on hand delivery. The addresses nominated for service are usually the registered addresses of the anticipated recipient, or such other addresses as are set out in the specific notice clause. The traditional thinking here is that a clear record of service helps mitigate any risk, should (for example) the recipient of a notice claim that it was never received (emails may be blocked by firewalls or held in abeyance by faulty servers.)

What if I get service wrong? What if I miss service?

If you plan to serve a formal notice, improper delivery could have severe consequences. Common law has shown that the wording of notice provisions are sacrosanct. As Lord Hoffmann expressed in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, “[i]f the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper”.  So it’s certainly not as simple as deciding to serve a notice to an alternative address where the recipient might actually receive it.

If you anticipate receipt of a formal notice, and you don’t currently have access to your nominated address, you are at risk of key rights being lost. For example, a contract may contain a provision that requires or permits a party to send notice of a dispute, which in turn triggers a period during which the counterparty must respond. If the counterparty does not do so, the contract may deem the counterparty to have consented to the disputed issue or waived any objection.

What should I do about it?

We recommend you review your critical contracts and look to formally amend notice provisions, where appropriate, to reflect your business’s virtual operating status.

Where this isn’t possible, if serving a notice, you should serve exactly as the contract requires. As a matter of good form and to avoid the potential of unnecessary disputes, you may then want to consider contacting the anticipated recipient and forwarding a copy of that formal notice to an agreed, alternative address or email account.

With regard to notices that you might receive, you should contact all parties to the relevant contract and provide them with an appropriate alternative address where a copy of that notice can be sent. If this can’t be agreed, you’re at high risk of such notices being missed, and your rights being lost.