The possibility of a pandemic caused by the avian grippe virus (H5N1) has received considerable media attention over new-made months, and an accompanying sense of inevitability and fear has emerged as the field awaits and prepares for an other pandemic. While the human toll of such an character could be devastating, the effect of an outbreak on businesses and commerce should not be underestimated or ignored.
As pandemics are, generally speaking, non-insurable events, the costs exit largely be retained by businesses and hence rich business tenaciousness plans are essential. A review of the allude of a pandemic on the ability to perform on-going decoctual obligations should form part of all business continuity plans. This update looks at ways businesses evict manage their risks of non-performance of contractual obligations in the event of a pandemic.
Risks to Businesses Resulting From a Pandemic
In the event of a prolonged pandemic, businesses whitethorn face difficulties in performing contractual obligations as a result of the succeeding(a):
Closure of premises and workplaces
Travel restrictions and quarantining
Shortage of labour/ risque absenteeism
Disruption to supply and distribution channels
Communication and decision-making difficulties
As a general rule, if the performance of a contract becomes more(prenominal) difficult or even impossible, the party which fails to perform its obligations is in breach of contract and is liable in damages to the other party. If there are no specific provisions in the contract dealing with the supervening event which has caused the difficulties in performing the contract (such as a force majeure clause), and no agreement can be reached between the parties on how to deal with it, the defaulting party may seek to have the contract discharged on or so other grounds, such as frustration.
Frustration
Under Hong Kong law, the precept of frustration allows the contract to be automatically discharged when a...If you wish to get a full essay, order it on our website: Orderessay
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