Corporate Law

CONTRACTUAL PROBLEMS RELATED TO THE CORONA VIRUS

FORCE MAJEURE, LOSS OF BUSINESS FOUNDATION AND LOSS MITIGATION OBLIGATIONS

What is the recommended procedure for companies with contractual law problems with contract partners, especially from China, who rely on force majeure in connection with the corona virus

  1. Contract review

First, a look at the contract text is recommended. Many international contracts between entrepreneurs contain clauses on legal consequences in the event of force majeure (so-called “force majeure” clauses). These can be designed in very different ways. Most of the time, the requirements and the deadline for assertion and the effects on the contractual relationship are precisely regulated. In most cases, such a clause stipulates that performance obligations are suspended for the duration of the Force Majeure. Often, a disclaimer is agreed at the same time and obligations to communicate are triggered. Epidemics are mostly covered by the contractual definition of force majeure. Read more…

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Impact of Coronavirus on Employment and Business Relationships: Force Majeure and Other Important Aspects

Undertakings who have difficulty in performing their obligations to cooperation partners and employees are faced with the following questions:

  • Is the virus a force majeure event?
  • Is the aggrieved party entitled to claim amendment of the contract from the other party?

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Korona – Ylivoimainen este (Force majeure)

SOPIMUSSITOVUUS

Sopimukset laaditaan aina niillä tiedoin, mitä sopimushetkellä on tiedossa. Sopimusoikeuden keskeisin periaate on sopimuksen sitovuus. Oikeustoimen solmivat sopijapuolet voivat yhdessä sopimusvapauden nojalla päättää velvoitteista, joita he sopimuksellaan sitoutuvat noudattamaan keskinäisessä suhteessaan. Sopimusrikkomuksista voi seurata vahingonkorvausvelvollisuus, sopimussakko tai muita oikeudellisia sanktioita. Read more…

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CORONAVIRUS: LEGAL ISSUES RELATED TO EVENTS

Quo vadis? – So as the ancient Romans said “where are you going”, or how many Austrians have recently had to say “where are you not going”?

What has been ordered – On Tuesday, March 10th, 2020, the government presented far-reaching restrictive measures to deal with the coronavirus for the next few weeks. Among other things, all outdoor events with over 500 participants and indoor events with over 100 participants are prohibited until the beginning of April (03.04.2020). However, what the government has not said is what that means for everyone. Read more…

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Coronavirus Emergency Declarations Trigger Anti-Price Gouging Laws

At the time of publication, at least twenty four states, plus Washington D.C. have declared states of emergency related to the novel coronavirus (“COVID-19”), with that number growing by the hour.  In addition to making more resources available to residents, in many cases, the declarations also trigger additional protections to consumers in the form of anti-price gouging laws.  These laws, which automatically go into effect, are intended to prevent merchants from significantly increasing the cost of consumer goods and services during a crisis.

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Covid-19: impact on contractual obligations in the travel industry supply chain

In last month’s article we looked at what obligations travel providers have to their customers in the event their holidays are affected by the Covid-19 outbreak. In this article, we will take a look at how the Coronavirus can impact B2B contracts in the travel sector; specifically, the contractual and legal issues arising in English law as a result of businesses in affected countries having to suspend, or even cancel, their operations.

Performing your contractual obligations: the English law position

The travel industry is a service-driven sector, and is reliant on a web of supply and demand relationships which will all be underpinned by contracts. The basic position under English law is that contractual obligations are absolute; this means a party must comply with its obligations regardless of the circumstances, and failure to do so may mean that party is liable to the other for breach of contract. However, in extreme circumstances, there are some exceptions to this rule. Read more…

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Coronavirus: A force majeure in the automotive supply, or just another supply chain dispute?

With the outbreak of the coronavirus, automotive suppliers and customers have scrambled to keep the supply chain running.  While these efforts have succeeded with few exceptions so far, the ability of suppliers to meet customers’ needs remains in jeopardy in many cases while the virus continues to spread.  As in other industries, this has suppliers and their counsel reviewing the force majeure clauses in their contracts to determine if these may provide relief if the suppliers fail to meet delivery requirement or are forced to incur additional costs to do so. Read more…

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Confronting the impossibility of performing under a contract: Using a force majeure provision in response to the coronavirus outbreak

Many businesses are feeling a strain on operations due to the recent global coronavirus outbreak (COVID-19). As the virus continues to spread, the long-term ramifications it will have for businesses are unclear. However, businesses that may be affected should consider what steps are necessary to mitigate their risks should any interruption in their businesses occur. One of the questions companies should ask is, “Does the coronavirus outbreak fall within the operation of a force majeure clause?” Read more…

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Force Majeure and Other Contractual Considerations in the Wake of the COVID-19 Pandemic

On March 11, 2020, the World Health Organization (WHO) declared the respiratory illness called coronavirus disease 2019 (COVID-19) a pandemic, making it the first time that the WHO has declared an outbreak a pandemic since the H1N1 “swine flu” in 2009. As the COVID-19 pandemic continues its rapid, global spread and the numbers of cases and deaths rise, the commercial effects for businesses also increase, including labor issues, regulatory issues from governmental restrictions and quarantines, supply chain and logistics issues from transportation and facility disruptions, and privacy issues from the use and disclosure of medically sensitive personal information. Because these commercial effects may result in an impacted party’s inability to fully perform its obligations under its contracts, companies should consider the risks under existing contracts, as well as how to address COVID-19 and other epidemics and pandemics in future contracts. Read more…

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QUESTIONS RELATING TO TRAVEL LAW RELATING TO THE CORONA VIRUS

Coronavirus travel warnings. Since December 2019, when the disease COVID-19 caused by the corona virus (SARS-CoV-2) was first diagnosed in the Chinese city of Wuhan, the new virus has spread rapidly worldwide and has already led to numerous victims in neighboring countries . The Austrian Federal Ministry for European and International Affairs initially issued a general travel warning with the highest security level 6 for Iran and South Korea and now for the whole of Italy; for China (Hubei with Wuhan) there is currently at least a partial travel warning with security level 5 (as of March 10, 2020; for the latest travel warnings, see https://www.bmeia.gv.at/reise-sitzhalt/reisewarlungen/). However, the travel warnings of each country only apply to their own citizens (for travel warnings from all EU member states, see  https://ec.europa.eu/consularprotection/content/travel-advice_de ). Read more…

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