What is the relationship between the sudden termination of established commercial relations and Covid-19?
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The sudden termination of established commercial relations is defined by Article L.442-1 II of the Commercial Code: |
- The termination of established commercial relations can only occur after the execution of a notice taking into account the duration of the commercial relationship.
- Any sudden termination is in principle sanctioned by the liability of the author of the termination.
- Two exemptions: non-performance by the other party of its obligations and the case of force majeure.
| The abrupt rupture of established ffffffchomrcial Le Covid-19 is defined by the article L.mmerce: |
Effects : The Covid-19 pandemic and its consequences are likely to be qualified as force majeure if they:
- beyond the control of the debtor;
- could not be reasonably foreseen;
- could not be avoided by appropriate measures;
- Make it impossible to continue business relations.
What implications?
A business partner can therefore abruptly terminate established business relationships without having to give any notice if this termination is justified by a case of force majeure.
The notice currently in progress, granted by the business partner, would not be suspended due to the effects of Covid-19.
PS: Failing to be qualified as an event falling under a case of force majeure, the Covid 19 pandemic and its effects could nevertheless justify such a waiver of notice in view of their unprecedented impact on the French economy. (Court of Cassation. October 6, 2017, n°08-12.416 which retained as exonerating cause of the responsibility for sudden rupture the economic crisis)
What behavior to adopt?
| For the party who would like to immediately break off its commercial relations: |
-Ensure that it can claim a case of force majeure and in particular verify that appropriate measures cannot be adopted to avoid the effects and consequences of the Covid-19 pandemic
- Notify the other party of its desire to immediately terminate commercial relations due to an event of force majeure
- Calculate the notice period that should have been respected in order to assess the financial risk possibly incurred
| For the party that wants to anticipate the abrupt termination of its relationship with its business partner: |
- Examine the situations of commercial relations established in the context of which the co-contracting party can invoke force majeure
- Negotiate the possible maintenance of commercial relations and/or the deadlines for the termination to take effect (if despite the force majeure, a residual execution of the contract can be envisaged)
