Failure of own company to fulfil its contractual obligations in relation to COVID-19
In any case, secondary problems with the fulfilment of own contractual obligations due to reasons on the part of the contractors must be taken into account. At the same time, it is necessary to take into account a crisis scenario which is not entirely unrealistic, e.g. forced closure of production due to quarantine measures (outbreak of disease), shutdown of production due to lack of raw materials or human resources.
Accordingly, the following measures/rules may be recommended for consideration:
- be careful when communicating with business partners not to make explicit assurances that future deliveries will not be compromised, which could make it difficult to claim force majeure later on, leave the back door open
- to review and, where necessary, modify force majeure provisions in commercial relations where this is realistic, i.e. in particular in relations where there is no framework contract and which are governed by their own general terms and conditions, i.e. in particular to explicitly extend the applicability of force majeure to the COVID-19 pandemic and the associated quarantine measures
- where possible, to include in the order confirmation a general reservation on the modification of the delivery date in relation to the quarantine measures, or to confirm delivery dates with a similar reservation where possible
- -review contractual relations with suppliers in terms of the applicability of force majeure and, in particular, identify those relations in which failure to fulfil contractual obligations cannot be justified by force majeure
- identify contractual relationships in which a notification obligation arises towards the contractual partner at the onset or threat of force majeure and, as soon as the first signs of a threatened breach of the company's contractual obligations towards its customers arise, comply with this obligation in a demonstrable form
- make every effort to remove the obstacle to compliance, e.g. approaching alternative suppliers, seeking possible cooperation partners to resolve compliance issues
- communicate with the customer in a demonstrable manner about possible alternative ways of fulfilling the obligation, extending the delivery period, etc., with a view to achieving the replacement of the original unfulfillable obligations with new fulfillable obligations (contract modification) or averting the imminent legal consequences associated with the breach of contractual obligations (e.g. settlement agreement, waiver of claims, etc.).
- collect all evidence related to COVID-19 that has or may have an impact on the fulfilment of obligations on the part of the own company, provide the customer with irrefutable evidence of the excusability of the breach of contractual obligations due to force majeure circumstances in order to avoid legal claims arising from the breach of contractual obligations of the own company
- any impediments arising in connection with COVID-19 that make it difficult or impossible to fulfil the contractual obligations to be submitted immediately for legal consideration.