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Proactive Management of Incentives Deals

18 Sep 2020


In light of the COVID-19 pandemic, companies need to determine if they are at risk of breach of incentives contracts and communicate with the incentive-granting authorities.

If you or your clients have incentives contracts, now is the time to examine your incentive agreements to understand the potential risks if your company is unable to perform key obligations.

The first step in any crisis is to determine exactly what the problem is. Review your incentive agreements to confirm with specificity your obligations. Second, closely review the language of your agreements to determine if any of your obligations can be delayed due to a “force majeure” provision, a “market conditions” provision, or a similar provision. Third, as soon as the crisis begins to abate, and perhaps sooner in certain situations, contact your incentive counterparty to discuss potential options.

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