Jonathan C. Lipson and Norman M. Powell*
The agreement below is a form which parties in a contractual relationship may quickly and easily use as a basis to preserve their relationship while the economy restabilizes following the disruption caused by the COVID-19 crisis. It does not speak to all issues that contract parties might face, but is intended to be a starting point that parties can use efficiently, preferably in consultation with a lawyer.
The form of agreement below is intended to be used either in an electronic or paper format, as the parties prefer. We have indicated below places where the parties must or may tailor the agreement to their specific needs.
This version contains the language of the model agreement only, without annotation. We recommend that you read the annotated version of this model agreement, here, which provides guidance on how to complete this form.
* Jonathan C. Lipson is the Harold E. Kohn Professor of Law at, Temple University-Beasley School of Law, where he teaches Contracts, Bankruptcy, Corporations, Commercial Law, Lawyering for Entrepreneurship, International Business Transactions, and a variety of other business law courses. Professor Lipson is a member of the American Law Institute and a Fellow in the American College of Commercial Finance Lawyers, and is active with the Business Law Section of the American Bar Association where, from 2011 to 2017, he was Section Content Officer.
Norman M. Powell is a partner in the Delaware law firm of Young Conaway Stargatt & Taylor, LLP, where his practice includes formation of and service as Delaware counsel to corporations, limited liability companies, and statutory trusts, and the delivery of legal opinions relating to such entities, security interests, and other matters of Delaware law. Mr. Powell is a member of the American Law Institute, the immediate past-president of the America College of Commercial Finance Lawyers, a member of the Permanent Editorial Board on the Uniform Commercial Code, and is active with the Business Law Section of the American Bar Association, for which he currently serves as Section Content Officer.
The views expressed herein are those of the authors and are not necessarily those of any organization with which either of them is affiliated. © 2020 American Bar Association. May be reprinted with permission with attribution.
THIS AGREEMENT (the “Standstill Agreement”), made this day of , 2020, by and between (“Debtor”) and (“Creditor”).
WHEREAS, Debtor and Creditor are parties to that certain , dated as of (collectively with the additional documents, if any, identified in and required or contemplated thereby, the “Underlying Agreement”); and
WHEREAS, Debtor and Creditor recognize that the COVID-19 pandemic has caused, or may cause, substantial disruptions in commercial relationships; and
WHEREAS, such disruptions may result in the breach of contracts between Debtor and Creditor which may, in turn, result in efforts to enforce rights or remedies under the Underlying Agreement, including legal actions such as self-help foreclosure, litigation, arbitration or other legal proceedings, whether by claim, counterclaim, demand, action or cause of action concerning the Underlying Agreement (collectively, “Legal Action”); and
WHEREAS, Debtor and Creditor wish to avoid Legal Action for a period of time during which their respective rights and duties under the Underlying Agreement will be frozen by and as set forth in this Standstill Agreement.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be bound, agree as follows: