Are your contracts prepared for the next global disruption?

Recent global events, including pandemics, geopolitical tensions, sanctions, and supply chain disruption, have exposed vulnerabilities in commercial contracts across sectors. In many cases, standard boilerplate provisions have proved insufficient to address the scale and complexity of modern business risks, leaving parties exposed to uncertainty, operational disruption, and potential liability.

Against this backdrop, businesses should reassess whether risk is being allocated clearly and effectively in their commercial agreements. Clauses dealing with force majeure, change in law, material adverse events, termination, nd related relief mechanisms should no longer be treated as routine provisions. They are critical tools for managing disruption and preserving contractual certainty.

A targeted contract review can help reduce the likelihood of disputes and improve commercial resilience. In particular, businesses should consider whether their agreements:

• clearly define the events that may trigger contractual relief, including pandemics, war, sanctions, regulatory changes, supply chain disruption, and political instability;
• specify the consequences of such events, including suspension of obligations, extension of time, renegotiation, or termination rights;
• impose clear notice requirements and procedural steps for invoking relief; and
• address mitigation obligations, including the steps a party must take to avoid, reduce, or manage loss.

This is especially important because courts and arbitral tribunals often interpret risk allocation clauses narrowly and by close reference to the contractual wording. General references to “events beyond reasonable control” may not, on their own, provide sufficient protection in the absence of clear drafting and appropriate procedural compliance.

For long-term or strategically significant contracts, businesses should also consider whether additional protections are needed. These may include tailored hardship provisions, more precise change-in-law mechanisms, allocation of sanctions risk, supplier contingency obligations, and clearer termination pathways where performance becomes commercially or legally impracticable.

As the legal and commercial environment continues to evolve, risk allocation provisions should be approached as strategic contractual mechanisms rather than standard boilerplate. Well-drafted clauses can play a critical role in protecting business continuity, limiting exposure, and reducing the scope for disputes when disruption occurs.

For advice on reviewing and strengthening risk allocation provisions in commercial agreements, please contact our Corporate & Commercial team.