Saturday, early afternoon, my favourite corner at the corner. I bought their best mix (freshly roasted, freshly grounded, a takeaway to brew at home) – supplies for the home office. It was sad to look at the empty tables. Restrictions on doing business – I think everyone will agree justified – are one thing, but […]
Saturday, early afternoon, my favourite corner at the corner. I bought their best mix (freshly roasted, freshly grounded, a takeaway to brew at home) – supplies for the home office. It was sad to look at the empty tables. Restrictions on doing business – I think everyone will agree justified – are one thing, but the deadlines for payment and performance of contracts are still running, the damages and lost profits will be enormous, and the bankruptcy appears at the doorstep.
The problem is absolutely scalable and affects a huge proportion of businesses. It is easy to predict that companies can, at no fault of their own, default on contracts, lose deposits and securities in the form of bank or insurance guarantees.
Will it be possible to pass the economical costs of these damages on to their “author” (sort of…), i.e. the state? The current legislation does not permit that. Art. 417(1) of the Polish Civil Code would give such a possibility only if e.g. the Regulation of the Minister of Health is found to be inconsistent with the Constitution, ratified international agreement or a statute. The chances for this are very slim. Taking into account what is happening right now in Europe, the regulation seems justified and adequate. Although the issue of the Act on Preventing and Combating Infectious Diseases and Infectious Diseases in Human Beings of 2008 is pending before the Constitutional Tribunal, the case seems to be concerning – paradoxically – anti-vaccination movements.
When the situation returns to normal, will I still have the place to buy the best coffee in the neighbourhood? That depends on the business itself. There are no deep pockets that we can reach out to for damages. So what one can do?
- Dust the contracts and check the force majeure clauses.
- Sit down at a table (or a conference call) with contractors and work out compromises.
- If you have to, use the tools that the Civil Code and Civil Procedure Code offers for this kind of circumstances.
There is no magic recipe, everything is in our hands and heads. The coronavirus-induced condition is a classic example of a prisoner’s dilemma, i.e. a situation where either side can gain by betraying the other, but both will lose if they both cheat. In such a situation one can only gain through mutual concessions and cooperation in this difficult time.
Or perhaps we will have yet another quick intervention of the legislator and will see a general regulation of force majeure in the Civil Code?