(Newswire.net — July 4, 2020) — The COVID-19 pandemic has taken the world by storm, sending multiple countries into turmoil as they search for answers. This is just as true in the United States as it is in any other part of the world. As the country starts to reopen, many businesses are trying to get back on their feet. This includes suppliers and distributors. At the same time, it looks like a second wave might be coming. California has already forced more than a dozen counties to close indoor gatherings and the parties from July 4th celebrations might contribute to another spike. As a result, some might be forced to shut down once again.
There are concerns that many businesses might not be able to handle a second closure, particularly with the PPP program all but done. For this reason, many are concerned that breach of contract cases might be coming. It is important for everyone to note some of the biggest issues that might take place in a breach of contract case. This will allow everyone to get prepared for the coming tide.
One of the most common types of breach of contract cases that might arise has to do with issues on the end of the supplier. This could be an actual or anticipatory breach; however, suppliers often get their materials from overseas. There could be restrictions on imports and shutdowns in other parts of the world might prohibit a supplier from fulfilling its orders. This could cause them to breach the agreement they have with the distributor, leading to a breach of contract case.
The other type of breach of contract case that might arise involves the distributors who pay the supplier. Due to the pandemic, many of these businesses have suffered a major drop in their revenues. This means that they might not have the money to pay the supplier. This could lead to another breach of contract case in the reverse direction. As a result, these cases might end up in court.
One of the major issues that will face the legal system is how these cases are going to be resolved. It is possible that one of the parties might try to claim something known as a force majeure. This is claimed when an unforeseen circumstance has caused the party to be unable to fulfill its end of the bargain. Government shutdowns and pandemics are often included in a force majeure in a breach of contract case; however, it is still incumbent on the party invoking this clause to prove that what transpired fulfills the exact terms of the contract. Therefore, everyone should reach their contracts carefully to know what constitutes a breach of contract and whether or not the force majeure clause might apply in this scenario.
These are a few of the biggest issues that might come up when looking at a breach of contract case. With much of the country bracing for a second lockdown, breach of contract cases are only going to become more common. It is important for everyone to be prepared as the stakes are high with breach of contract cases.