The Coronavirus is currently raging in China and there are increasing cases of infection in other parts of the world. This has (possible) consequences for entrepreneurs affiliated with FHI, both in the short and long term. This news item focuses on the (legal) consequences and there is the opportunity to ask questions to FHI partner Lexsigma Attorneys.
According to the National Institute for Public Health and the Environment (RIVM), the coronavirus does not survive well outside the body, certainly not on cardboard or other packaging materials. Fortunately, the packages from China do not pose a risk of infection and the virus does not seem to lead to stricter customs procedures (yet). However, as a Dutch entrepreneur, you may still experience problems with this virus.
It is uncertain how the virus will develop. Therefore, prepare yourself well. Map out which collaboration partners/suppliers are located in the region where the virus is currently prevalent. Take into account that these companies may come to a standstill and respond to this by, for example, already looking for alternative suppliers. Then you will be there in time and ensure that your stock remains at the right level and that you can meet your contractual obligations to your customers. Check your current agreements and adjust them where possible.
It is also possible that you are already confronted with the consequences of the virus and your supplier is no longer able to deliver the requested products and as a result you can no longer meet your obligations to your own customers. In that case it is important to check whether an appeal to force majeure or unforeseen circumstances is possible.
Force majeur
Force majeure is a legal concept that indicates a non-attributable impossibility to meet a contractual obligation. Many (international) commercial agreements contain such a provision. Therefore, read the agreement carefully. Also include the general terms and conditions. Do you use the FHI general terms and conditions of delivery? These conditions (article 13) stipulate that force majeure means that neither Party is obliged to fulfil any obligation. A legally valid appeal to force majeure thus prevents liability. But when is there force majeure? Article 13.2 of the FHI conditions describes fifteen force majeure situations. In the case of the Coronavirus, the situations (I) force majeure of suppliers of the Contractor and (XIII) epidemics and pandemics can provide a solution.
If your agreement or terms do not contain a force majeure clause, there is often still a legal basis to fall back on. In that case, first determine which law applies to the agreement. For example, Dutch law contains the following provision: “A shortcoming cannot be attributed to the debtor if it is not due to his fault, nor is it for his account by law, legal act or generally accepted views.” Based on all the facts and circumstances, it must then be determined who must bear the consequences of the virus according to generally accepted views, buyer or seller?
Unforeseen circumstances
In the absence of a force majeure situation, an appeal to unforeseen circumstances can also be considered. Some restraint should be exercised in this regard. In particular, if the parties have considered force majeure situations when entering into the agreement and the specific incident cannot be classified under one, a judge will be reluctant to apply unforeseen circumstances as an escape.
Communication and measures
If you are dealing with the tentacles of the coronavirus, communication is essential. If you are in conversation, you can look for a solution together. Looking for a solution is even mandatory under the obligation to mitigate damage. Take this seriously. Communication is also a requirement for invoking the force majeure situation. For example, the FHI conditions stipulate that an appeal to force majeure must be reported as soon as this is practically possible. Finally, it is advisable to consult your insurance policy. Although a situation such as the coronavirus will not be covered by all (standard) insurance policies, it is advisable to check this and adjust your insurance where possible. When checking your insurance, also pay specific attention to the provision that prescribes how and when you must make a report.
Any questions?
For all your legal questions about the consequences of the coronavirus, you can contact FHI partner Lexsigma Advocaten (020-8940700). Ask for Bob van der Kamp, Ramon Pasma or Lara Smeets. You can also send an email to: Corona-commercieel@fhi.nl.
Nederlands