Moving Chattanooga And Tennessee Businesses Forward In The Ever-Increasing Conflicting Policies And Rules Of COVID-19

Saturday, April 25, 2020 - by Terry Olsen, Attorney, Olsen Law Firm and Mike Goode, Special Counsel, Lewis Thomason

Since March 12, 2020, Governor Bill Lee has issued 16 Executive Orders regarding COVID-19, ranging from facilitating the treatment and containment of COVID-19 to limiting non-essential services and gatherings to facilitating remote notarization and witnessing of documents.  Additionally, President Trump has issued numerous Executive Orders and Proclamations in response to the significant disruption that COVID-19 has caused in the lives and livelihoods of Americans.

Basically, Tennesseans live in a time of great uncertainty.  No one knows the length of time the pandemic will last, nor many details regarding the virus.  However, business must continue to move ahead, even during this great uncertainty.

State Bar Associations, like the Tennessee Bar Association, have been forming task forces made up of attorneys from “affected practice” areas to discuss how attorneys can help their clients with wills and other legal documents that require witnesses or notarization, while also trying to protect the safety of their clients and themselves during the COVID-19 pandemic.  Even though bar associations—like the TBA—have been able to assist their governors in creating temporary relief from outdated and contradictory law(s), Americans are facing new restrictions on immigration, social distancing requirements, etc.  Practical problems appear as well, since supplies might be difficult to obtain, and workers may not be allowed in their work facilities.

In addition to Executive Order 29 by Governor Bill Lee, there will be more Executive Orders & Proclamations by the President, governors, and mayors which will need to be dealt with and understood by businesses and lawyers.  But, simply from the perspective of closing business transactions long term in the current environment, special attention should be paid to the following.

First, in terms of contracts and document content, one must actually contemplate future shutdowns between the parties and how that will be handled, and which party will bear which risk.  The more specificity the better.  Although this may require a bit more work, the issue resolved will actually allow deals to close, business to move on, and issues that arise, further shutdowns, greater immigration restrictions, government loan program requirements, etc. to be effectively dealt with.  Remember, standard force majeure clauses in contracts, which are clauses designed to excuse a party from having to complete a contract due to unforeseen circumstances, would not apply to new contracts since COVID-19 is not unforeseen.

Second, documents should, as much as possible or practical, be designed to be executed electronically and in counterparts (i.e. each signature on a separate page).  Moreover, whether current law can be utilized regarding remote notaries, temporary executive order regarding using Zoom, etc. should be explored.  Of course, not all documents may be executed this way, since lenders, title companies, etc. may require “wet” signatures, i.e. a non-electronic physical signature.  Recently, in Tennessee, Executive Order 26 allows for relaxed rules for document execution, but that order only is effective until May 18.  Regardless, aside from certain estate planning documents, real estate documents, governmental documents, and loan documents, electronic signatures generally may be used.  The key is to make sure the documents are property written to allow for it.

Third, for international trade and business, and domestic business as well, the movement of people and things have been restricted.  Recent government actions have also limited immigration, and the pandemic has caused many cancelled flights.  However, investment into the United States continues, as does trade.  Therefore, rules, and regulations should be carefully analyzed to come up with flexible plans that contemplate the current uncertainty and allow deals to close.  Movement of workers and products, especially internationally, will have to be carefully planned for.

Therefore, it is critical to properly allocate risk and contemplate document execution issues. By building in the proper planning, while still as best as possible contemplating uncertainty, it is still possible to complete transactions and move deals along, even with ever changing policies, rules, and regulations due to COVID-19.  

 


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