Extreme winter weather can cause serious problems. For children, winter weather often means snow days and an escape from the confines of the classroom. For manufacturers, heavy snow and ice can mean absent workers, power outages, and supply shipments that do not arrive. In many lean manufacturing industries, there is little or no margin in the supply chain to accommodate such disruptions and extreme weather can mean missed deliveries to customers.
Extreme winter weather is not limited to the northern states. In fact, winter weather can cause even greater disruptions when it hits in states that are unaccustomed to snow and ice on a regular basis. In such cases, local governments often do not have sufficient snow removal equipment necessary to ensure that roads remain clear.
When winter weather shuts down your plant, what do you do? As with most aspects of running a business, it helps to have a plan in place. However, when extreme winter weather impacts production, there are a number of issues that manufacturers should consider:
Safety first – Some winter weather events are so extreme that they can pose a safety hazard with icy roads, dangerous temperatures, and other safety concerns. In such cases, the safety of all involved should be your first concern.
Look at the contracts – When extreme weather prevents you from making timely deliveries to customers, your first step should be to determine what your rights and obligations may be under the contract. Is there a specific provision that addresses inability to perform due to extreme weather?
If possible, declare a force majeure – Most states recognize some form of the legal doctrine commonly known as force majeure. At its basic level, the doctrine can excuse a party from untimely performance of a contract in certain circumstances where the delay is caused by an occurrence beyond the party’s control (sometimes referred to as an “act of God”). In some cases, contracts will identify the specific kinds of occurrences that may qualify as a force majeure event. When not addressed by contract, whether the circumstances in question rise to the level of a force majeure event will depend on numerous factors including the nature and severity of the event, the degree to which it could have been anticipated, and the applicable law governing the contract.
Notify the customer – Even if you cannot claim a force majeure event, it is important to notify the customer of the situation. Be sure to take note of any specific notice requirements in the applicable contract. As a practical matter, most customers will prefer to know in advance that their shipments will be late and most will appreciate an estimate as to when normal production can resume. In the worst case scenario where inability to perform results in a breach of the contract, providing notice will put the customer under an obligation to mitigate its damages.
This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.