The outbreak of the Coronavirus and the measures taken by various governments to prevent its further spread have numerous implications for businesses. Business interruptions, problems with timely delivery of goods or financial issues such as prolonged payment terms or even the total failure to meet financial or other contractual obligations – business relationships are undeniably under pressure during this period.
Many entrepreneurs wonder what party is liable for the (usually unforeseen) risks and costs as a result of the happenings, and want to know how this actually works from a legal point of view. Is force majeure applicable in a particular case? Hardship? Unforeseen circumstances? Does the insurance cover this case? Can an agreement be terminated based on the current situation?
Unfortunately, in many cases, the answers to such legal questions depend to a great extent on the specific details and circumstances. And right now we are dealing with a context and circumstances that are, to say the least, unique and exceptional. Therefore, estimating the legal feasibility of a position is currently an exercise with an uncertain outcome.
However, more importantly, even if these theoretical questions can be answered at all (with all the uncertainties that may apply), that is not the end of the story. After all, there is also the other party, the party with whom a conflict may arise or escalate. The party that may have formulated their own answer to the same or completely different questions.
When the relationship is under pressure and the urgency to find a solution is great, there is no time and opportunity to exchange extensive hypothetical legal views, especially if this should take the form of (now even longer taking) legal proceedings.
That is why it is at this particular moment in time more than ever logical for entrepreneurs dealing with business disputes to consider different methods of alternative dispute resolution, such as (inter)mediation or arbitration. In today’s world, there is a good chance that organizations and companies will benefit from a quick solution, in a process that they control themselves – instead of investing in litigation that may take many months, if not years, and in which a third party is in the driver’s seat.
Whether it is resolving or mitigating conflicts with customers, suppliers or even competitors, it is obvious that both parties would benefit from a quick solution in a flexible and informal process. It will enable them to quickly continue their business in these challenging times.
Do you want to know if your conflict is suitable for mediation? Claws can tell you more about it. Make an appointment (call) or call / email for more information.