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Coronavirus COVID-19 Contract Law

Discussion in 'Consumer Law, Contracts, Warranties' started by covid19, Mar 13, 2020.

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  1. covid19

    covid19 Law Topic Starter New Member

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    I need to deal with some business problems due to the COVID-19 coronavirus. I don't know what my legal rights are for contracts that are canceled due to coronavirus concerns. I am hoping to get some opinions and hear what other people have been doing.

    In early February I put in orders for products that have not been delivered. I suspect that some of my suppliers might have not fulfilled my orders because they could get more money by breaking my contract and telling me that they are canceling the orders due to having no stock because of coronavirus. Some of these places were taking orders but when you called you were told that they were backorders because stock was out. On their website it still showed that they had items in stock for several days before my order was canceled.

    I am also not sure how to approach shipments I was expected that I am told that are not going to be fulfilled because of coronavirus issues. The sender told me that it is an act of God and now is released from the contract. I don't agree. It is not like lightning struck their shipments and destroyed the products that were going to be shipped to me.
     
  2. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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    Online inventories are not always correct.

    What does the contract say?
     
    hrforme likes this.
  3. adjusterjack

    adjusterjack Super Moderator

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    You've got a right to sue anybody for anything, anywhere, any time. I read the other day that airline passengers are suing the airline for $1,000,000. For what, you ask? For the emotional distress of there being the chance of catching the virus. In other words, suing for nothing. They didn't actually catch the virus.

    So, if you want to jump on the bandwagon of suing for nothing, be my guest.

    These products you ordered wouldn't have happened to be from another country, would they?
     
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  4. Tax Counsel

    Tax Counsel Well-Known Member

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    It depends a great deal on exactly why the seller fails to complete the contract and what the contract itself says. If the seller itself unexpectedly finds itself unable to get the product because the manufacturer was forced to shut down due to the virus and for that reason cannot complete the contract the seller is generally only liable to refund the money you paid for the product. Until you know the details, though, you won't know your potential remedy.
     
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  5. zddoodah

    zddoodah Well-Known Member

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    No way to give you any sort of informed response without reading the contracts and knowing the relevant facts and circumstances.
     
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  6. Zigner

    Zigner Well-Known Member

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    Just as an FYI - the principle that the supplier is referring to is known as "force majeure".
     
  7. Michael Wechsler

    Michael Wechsler Administrator Staff Member

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    Hello all, hope you're safe, sound and coronavirus free. We encountered this issue during an attempt to purchase Purell hand sanitizer from an online store that was taking backorders but not actually stating that they were out of stock. The order was stuck after "processing" just before the "shipped" progress bar on the customer order portion of the medical products website. After contacting customer service for status, we were informed of the true nature of the shipping delay which was not a few days but over a month. The Purell order was canceled and the website updated its website on product pages to state that it was out of stock and back ordered.

    Most reputable commercial online stores will have a provision in their terms of service that states that an item may be out of stock and that a purchase order is not a guarantee, with remedy being limited to a refund of purchase paid. This issue is not novel to the coronavirus / COVID-19 but generally. For example, the company discovers that several boxes of Purell or Clorox / Lysol disinfectant / antiseptic wipes that it thought it had in stock were punctured and could not be shipped to the customer. Your contract terms are stated to you as to remedies in the event that the item could not be shipped.
     
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  8. Michael Wechsler

    Michael Wechsler Administrator Staff Member

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    Agreed and whether the manufacturer may play a role as between the buyer and seller is, as you put it, depends a great deal on what the contract itself says. If the terms of the buyer-seller contract doesn't address contingencies, the seller may be liable for more than just the money paid under the contract.

    If the deal is to provide 100 widgets by Wednesday, it's not the buyer's responsibility to manage the seller's inventory. And this is why it's usually important to ensure that one's business contracts are reviewed by an attorney and not recycle someone else's contracts sans proper legal review. A force majeure clause (commonly referred to as an "Act of God" as @Zigner points out) addresses the possibility of non-delivery due to highly unusual circumstances due to major, unforeseen and unavoidable forces such as a hurricane, tornado, etc. A contingency clause also may address supply shortages so that the buyer knows in advance the circumstances when delivery may not occur.
     
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