When a contracting party declares bankruptcy, it is crucial to grasp the implications for existing contracts. This article highlights the most important legal ramifications for the non-bankrupt parties involved.

Continuation or Termination

It is an unfortunate reality that the number of insolvencies in the construction sector seems certain to rise in coming months as the economic impact of COVID-19 takes effect. In this context, the recent Supreme Court decision in Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25 is particularly relevant.

This case concerned important questions regarding the compatibility of two statutory regimes: