March, 21 2020
Published by CCI National
By Elia Associates
COVID-19 Bulletin No. 8: Contracts & Managing Them Going Forward
With the presence of COVID-19 requiring condominiums to think ahead on Spring contracts and regular contracts, we have the following questions for your Board to consider as you think ahead.
With the presence of COVID-19 requiring condominiums to think ahead on Spring contracts and regular contracts, we have the following questions for your Board to consider as you think ahead. (Due diligence and prudence are mandated by Section 37 of the Ontario Condominium Act, 1998).
- What is the purpose of the contract?
- Can a Board/should a Board terminate a contract? Is delaying a better option?
- What are the contractors’ safety protocols?
- Does the Corporation or its consultant have to put a contractor on notice?
- Do you need a professional opinion as to whether or not the contract is frustrated?
- Who manages the safety protocols, the Corporation or the general contractor? Are the protocols adequate? Is there an external standard to be met?
- Who has a duty to mitigate damages?
- What rights does the contractor have under the contract? What rights does the Corporation have?
- Are contractors able to fulfill their obligation? Should parties mitigate damages? How?
- What is reasonable in the contract? Where commitments contractually have been made, boards may not have the ability to delay or terminate without consequence. Here it is important to recognize the importance of reviewing CCDC contracts and determining if the same will have to be delayed in providing the necessary notice to contractors.
Subject to the nature of the work, given the unpredictability of the pandemic and the steps required to manage it effectively, the Corporation may want to proactively take steps to delay performance by providing adequate notice. Please get advice and document the Corporation’s due diligence process.
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