Do your supply chain contracts protect your interests as lockdown measures ease?

News Article

The easing of lockdown measures has extensive implications for the operations of businesses.

This may affect the ability of different suppliers to deliver goods on time, which may, in turn, have a knock on effect for your own business, with a shortage of raw materials or limits on the number of employees you can accommodate safely in the workplace, all affecting productivity.

Matthew Johnson, as Associate Solicitor with Palmers, who specialises in contract law, said: “In these circumstances, you should review whether your current agreements allow for any relief from your usual obligations or contain force majeure provisions. You should also assess which contracts carry with them the most severe penalties where you cannot meet your obligations.

“This will enable you, taking other commercial considerations into account, to prioritise the contracts you focus your operations on.

“Another open to you is to consider re-negotiating your supply chain contracts to ensure they are effective in protecting your interests.”

Terms you might need to vary include:

  • The value of payment in respect of certain goods;
  • Timescales for making payments;
  • Timescales for delivering goods;
  • The quantity of goods that will be delivered;
  • The specification of the goods that will be delivered; and
  • The penalties that failing to meet obligations will attract.

Matthew added: “The complexity of supply chains means that you should seek advice at an early stage where you are either concerned that a supplier may be unable to meet its obligations or where you are concerned that you may not be able to meet your own obligations.”

For help and advice with business contracts, please contact us.

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