Partner Cynthia Rigsby was quoted in the MultiChannel Merchant article, “Coronavirus Impacts Being Felt Far and Wide in Retail, Ecommerce,” about the toll the virus is taking on retail and the boost it is giving to ecommerce retailers.
Rigsby said retailers, manufacturers and brands need to develop and execute an effective supply chain response plan in order to mitigate risk and prepare for any interruptions. This includes reviewing “force majeure” language in their supply chain partner contracts, referring to a legal doctrine that exempts parties to a contract from non-performance liability due to factors beyond their control.
While most such provisions are unlikely to list disease, epidemics or quarantines, Rigsby said many include general provisions covering natural disasters, ‘acts of God’ or acts of government.
“The coronavirus outbreak presents a somewhat unique situation in that it includes both a naturally occurring component – the virus itself – and a government action component, such as quarantines and other measures,” she said.
Rigsby also advised any parties to M&A transactions to review any “material adverse change” clauses in their agreements to assess the impact of the coronavirus outbreak.