The Government is consulting on plans to prohibit the enforcement of 'termination clauses' in favour of a supplier in contracts for the supply of goods and services where the clause permits the contract to be terminated on the ground that one of the parties to it has entered formal insolvency. It will still be possible to terminate for other reasons - for example, non-payment. The Government acknowledges that certain types of financial products and services represent special cases and that there are grounds for exempting such products and services – it is not yet known if insurance will be an exempted service. In any event, it is fairly unusual for an insurance policy to provide that it will be terminated in the event of an insured's (rather than an insurer's) insolvency.
Termination Of A Contract Due To Insolvency
Clyde & Co
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Clyde & Co is a leading, sector-focused global law firm with 415 partners, 2200 legal professionals and 3800 staff in over 50 offices and associated offices on six continents. The firm specialises in the sectors that move, build and power our connected world and the insurance that underpins it, namely: transport, infrastructure, energy, trade & commodities and insurance. With a strong focus on developed and emerging markets, the firm is one of the fastest growing law firms in the world with ambitious plans for further growth.
The Government is consulting on plans to prohibit the enforcement of ‘termination clauses' in favour of a supplier in contracts ...
