Has the novel coronavirus affected your business?

Feb 21, 2020

The novel coronavirus (now known as COVID-19) is very quickly becoming a worldwide emergency, with a number of countries responding to the outbreak with strict policies including travel and trade restrictions. If your business depends on suppliers, tourism or labour from affected regions (including buying from and selling into China), you might already be impacted by the disruption.

What’s the status of my legal agreements?

As a result of the coronavirus outbreak, you may not be able to perform your contractual obligations due to supply delays, government restrictions and absenteeism. If this applies to your business, you should review your contracts soon, to determine whether a force majeure claim is available to you, and any contractual limitations on your ability to claim that the force majeure event has impacted your ability to perform.

Whether or not a force majeure clause will provide you with protection from the commercial impacts of the coronavirus will depend upon the language of the clause, and the intent of the contracting parties.

Depending on the clause, relief available to you may include the suspension of your obligations under the contract, relief from liability for delay or non-performance or possibly even the right to terminate the contract.

What if my contract doesn’t contain a force majeure clause?

If you don’t have a force majeure clause you can rely on, all is not lost. The novel coronavirus may cause your agreements to be frustrated, and other remedies may be available to you.

If you are concerned about the performance of your obligations (or another party’s obligations) under an agreement, the KKI Commercial team is here to help.