The COVID-19 pandemic has caused restrictions on most aspects of our lives. Throughout the course of the pandemic, many individuals have had to adapt to varied methods of virtual communication. Virtual meetings, software systems, and more frequent forms of one-way communication via email and SMS are becoming the ordinary, while in-person relations are mildly estranged from the concept of "normal". Despite the challenges, businesses must continue to flourish. A primary example of this is the Fairstone Financial Holdings. V. Duo Bank of Canada case.
On February 18, 2020, Duo Bank of Canada concerned a Share Purchase Agreement of Fairstone Financial Holdings Inc. and its subsidiaries which considered a sales price that was estimated to be over $1 billion at closing. The closing date was scheduled for June 1, 2020, with an outside extended closing date of August 14, 2020. On May 27, 2020, Duo advised Fairstone that it would not be closing on June 1, 2020, claiming that the Material Adverse Effect (MAE) clause and other protections were caused by the COVID-19 pandemic. This therefore gives Duo the right not to complete the transaction (sentence is too long, cut it into parts). In response to this, Fairstone commenced litigation in order to compel Duo to complete the transaction because if the SPA was terminated, Fairstone would not be able to sell for the same price that Duo had offered. The court concluded that COVID-19 fell into the definition of the first carveout, and that the changes to Fairstone’s business were evident within the entire market where Fairstone operates.
Therefore, Fairstone had not been disproportionately affected (change the flow a bit). Now, we must consider that in this case the forms of communication during the pandemic are primarily limited to virtual communication, which may have been advantageous to those involved in the case that are not able to attend crucial connections in person. For example, hearings were held virtually or written, and communications between individuals were done by one-way communication systems such as email.
The proper use of the technology/software used in this case lead to concrete communication between important Businessowners, and efficient time management for the individuals in each party. Buzaker Law Firm is ready and willing to assist in accommodating and sustaining a proficient communication line between Businessowners and other parties of importance, while maintaining a professional relationship to optimize the satisfaction of our clients.
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