On 30 January 2020, the World Health Organization declared that the coronavirus outbreak constituted a public health emergency of international concern. The full impact of the outbreak and the resulting precautionary measures imposed by the PRC and Hong Kong governments, as well as other countries, remains to be seen.

During this critical period, companies may face various difficulties in fulfilling their existing contractual obligations because of business disruptions, including:

  • closures of workplaces and ports;
  • disruption to supply and distribution channels;
  • disruption to auditing work;
  • restriction in free movement of personnel and shortage of labor;
  • cancellation, suspension or postponement of events;
  • and weakened regional demand.

Multinational companies are implementing, or will soon be implementing, measures to manage the impact on their businesses in the region and beyond. We also see companies evaluating potential exposure to the possible consequences of the outbreak, including the possibility of invoking the force majeure clause in their contracts.

Our alert discusses force majeure clauses in contracts governed by Hong Kong law and what steps clients can take under the current circumstances. Please feel free to share the alert with your colleagues who might also be interested in the topics raised.

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