In these challenging times, when companies may struggle to fulfil their contractual obligations, they may seek to terminate contracts by examining the terms to search for a breach. As a result, your paperwork must be kept in order. Contractual claims regularly fail because the exact nature of the contract cannot be proved. Increased awareness of the individual clauses in a contract can help to prevent this.
comment www.pharma-mag.com CREDIT CRUNCh NOT ChEmICaL CRUNCh Peter Snaith, Head of the Chemicals and Pharmaceuticals Group at Dickinson Dees LLP, examines how to survive the downturn. hese are desperately worrying economic times! The credit crunch and uncertainty in the world financial markets continue to play havoc with the global economy. Pharmaceutical companies will be well aware of the potential for some of their suppliers to go into liquidation, with devastating, domino-effect consequences. To survive the downturn, companies are going to have to be focused and prepared. To begin with, robust contracts are crucial. Longstanding informal relationships and understandings are unlikely to provide the certainty required if a purchaser or supplier needs to exercise its rights. Both parties need to know their exact obligations and entitlements within the contract and the quantity and timing of goods or services that are to be provided. This will prevent future uncertainty and potential litigation. The industry has recently witnessed a number of purchase Peter Snaith orders being cancelled. If your customer cancels a vital campaign or if a presumed steady flow of demand dries up, are you confident you contracts by examining the terms to search for a breach. As a know where you stand? result, your paperwork must be kept in order. Contractual claims If you are dependent on third party suppliers who may be unable regularly fail because the exact nature of the contract cannot be to deliver, you must consider the extent to which you can commit proved. Increased awareness of the individual clauses in a contract to supplying the goods at the same price. A rise in the price of raw can help to prevent this. Whilst a force majeure clause wouldn’t materials and petrol prices could increase your costs. A force majeure ordinarily offer protection against increased costs, it can allow a clause allows contracts to be wavered if circumstances beyond the company to suspend its obligations or break the terms of a contract control of the parties render the contract undeliverable, but this will in circumstances beyond the control of both parties, such as war, not protect you from an increase in production costs. No matter how strike or a natural disaster. By clarifying the terms of this often significant the rise may be, such “hardship” clauses rarely have the overlooked clause, companies may be able to invoke it in the case teeth they need to guarantee the protection they allude to. Whilst the of supplier liquidation. To argue that the economic downturn in itself downturn has driven everybody to very carefully assess the extent of constitutes an event of force majeure would be s
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