The global supply chain has faced unprecedented challenges in recent years. From natural disasters to political tensions, disruptions have become a new normal. When these disruptions occur, businesses with existing contracts can find themselves facing disputes with suppliers or customers. At Shaumyan and Derbarseghian, LLP, we understand the complexities of navigating contract disputes in this volatile environment. This blog explores strategies businesses can employ to navigate these challenges and protect their interests.
How Supply Chain Disruptions Lead to Contract Disputes
Supply chain disruptions can trigger contract disputes in several ways:
- Delayed Deliveries: Missed deadlines due to disruptions can lead to claims of breach of contract and potential penalties.
- Price Fluctuations: Sudden price increases for raw materials can create disagreements over pricing terms outlined in contracts.
- Quality Issues: Disruptions can impact product quality, leading to disputes about product specifications and potential product recalls.
- Force Majeure Clauses: These clauses outline unforeseen events that may excuse a party from fulfilling contractual obligations. However, interpreting “force majeure” in the context of supply chain disruptions can be contentious.
Strategies for Navigating Contract Disputes
Here’s how businesses can navigate contract disputes arising from supply chain disruptions:
- Review Your Contracts: Thoroughly examine your existing contracts, paying close attention to “force majeure” clauses and provisions for price adjustments.
- Open Communication: Maintain clear and open communication with your suppliers and customers. Explain the disruption’s impact and explore collaborative solutions.
- Explore Alternatives: Work with your counterparties to find alternative solutions, like sourcing materials from different suppliers or adjusting delivery schedules.
- Document Everything: Maintain a record of all communication and events related to the disruption. This documentation will be crucial if litigation becomes necessary.
- Seek Legal Counsel: An experienced commercial law attorney can advise you on your rights and obligations under your contracts and help you navigate complex legal issues like “force majeure” clauses.
Shaumyan and Derbarseghian, LLP: Your Guide Through Contractual Challenges
Supply chain disruptions can be stressful, but with proactive planning and clear communication, many disputes can be avoided. Shaumyan and Derbarseghian, LLP, is here to help you understand your contractual rights and obligations. We can guide you through negotiations, explore alternative solutions, and if necessary, provide strong legal representation in case of litigation.
Contact us today for a consultation and discuss how we can help you navigate contract disputes arising from supply chain disruptions.
Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Please consult with an attorney for specific legal guidance.
