Advice for Businesses in Dealing with the Expanding Coronavirus Events

Contracting Performance and Litigation Risk

March 05, 2020

Kevin P. Broughel, Arielle Dragon, Anna Faber & Michael Fisher

Click here to read the Contracting, Performance and Litigation Risk client alert

CoVid 19 has already caused disruption of expected work flows and supply chains. Some vessels are being restricted from entry into ports or departures from ports. Suppliers and vendors are indicating delays in delivery or inability to perform. Just in Time inventory methods are under stress. Physical and financial markets are disrupted.

To address these issues, businesses should:

• Review with counsel the terms of existing supply contracts and delivery or other performance obligations. In particular, review any Force Majeure or Act of God clauses, review clauses related to timing of deliveries and delay clauses. 

• Consider whether delays are creating a frustration of contract purposes and what remedies may be available.

• Consider whether to provide notices to suppliers and vendors regarding expected performance

• Consider whether to provide notice to customers regarding delay or interruption.

• Consider whether disruptions in financial markets are affecting contracts subject to pricing arrangements or similar financial arrangements.

• Consider whether disruption in financial markets will affect planned or proposed financings, or investment operations or expectations

• Consider the potential for claims to be made as a result of supply delays, performance delays, or stock price effects of market disruptions