COVID-19 and the broken Supply Chain

COVID-19 and the broken Supply Chain

The Corona crisis is having massive effects on the economic aspects of life. Whole regions are under quarantine, companies have closed down or switched to short-time work. Many areas have come to a standstill.

In our networked world, this leads to domino effects, as every company is linked to a large number of other companies via supply chains. The parts manufacturer supplies the end product manufacturer, the latter supplies the wholesaler, the latter supplies the retailer who sells to the end user.

Corona is breaking the supply chains. The parts manufacturer can no longer supply; at the other end of the chain, the retailer does not want to be supplied due to a lack of customers. Tourism businesses are a typical example of companies at the end of the supply chain that no longer have a need for goods or services. Some of them have been closed down by the authorities, cannot be reached at all due to quarantine measures or simply no longer have a need for the goods that were ordered.

From a legal perspective, the questions arise as to who bears the risk of the interrupted supply chains, whether it is possible to terminate supply contracts and how companies can best act in this situation.

These questions are discussed by our lawyers Mag. Melanie Gassler-Tischlinger, LL.M. and Dr. Georg Huber, LL.M., CIPP/E in an article for “Tiroler Wirtschaft”, the newspaper of the Tyrolean Chamber of Commerce.

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