CIGA 2020 and IA 1986 s 233B: commercial contract drafting checklist on ipso facto restrictions, moratorium/restructuring plans, termination rights, supplier safeguards and risk mitigation

Published by a LexisNexis Commercial expert

Checklists

This checklist of resources highlights key considerations when preparing, reviewing and negotiating commercial contracts to take account of the limits on ipso facto provisions brought in by the Corporate Insolvency and Governance Act 2020 (CIGA 2020), and to ensure agreements remain compliant and workable on insolvency.

Corporate Insolvency and Governance Act 2020-the impact for commercial lawyers

CIGA 2020 amended the Insolvency Act 1986 (IA 1986), introducing measures to secure the continuity of essential supplies and to curtail contractual termination rights triggered by insolvency (the so-called ‘ipso facto’ clauses) in contracts for goods and services. The issues most pertinent to general commercial practitioners when drafting and negotiating contracts are:

contractual rights to terminate for an insolvency event, or to take any other step because of a customer’s insolvency, in contracts for the supply of goods and services, are no longer effective
the creation of a company moratorium, available to all companies, enabling companies to develop restructuring proposals without creditor pressure
the introduction of a restructuring plan, a new formal process allowing companies to cram down dissenting creditors

The CIGA 2020 reforms reach beyond mere restrictions on termination rights and have a significant practical effect on suppliers’ ability to manage their risk...

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Web page updated on 27/05/2026

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