Introduction:

The Australian Federal Government announced temporary amendments, effective 24 March 2020, to insolvency and corporations law in response to the challenges that businesses are facing as a result of the COVID-19 crisis. These amendments provide a safety net to businesses in challenging times to foster survival for those businesses once the crisis has passed.

A party's right to terminate a contract in the event that the other party becomes insolvent is one of the most commonly seen termination rights in outsourcing and technology agreements. However, the effectiveness of such provisions in the future could change in agreements governing the provision of IT services, as the new Enterprise and Regulatory Reform Act 2013 gives the Government the power to extend the law that currently protects supplies of gas, water, electricity and communication services during an organisation's insolvency to the supply of IT services.