On 30 January 2020, the World Health Organization (WHO) declared that the coronavirus (officially named COVID-19) outbreak constituted a public health emergency of international concern. The full impact of the outbreak and the resulting precautionary measures imposed by governments around the world, including Taiwan, remains to be seen.
During this critical period, companies may face various difficulties in fulfilling their existing contractual obligations because of business disruptions, including but not limited to:
- Closures of workplaces and ports;
- Disruptions to supply and distribution channels;
- Disruptions to auditing work;
- Restrictions in the free movement of personnel and shortage of labor;
- Cancellations, suspensions 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.
In this alert, we discuss relevant articles under Taiwan’s Civil Code and force majeure clauses contained in contracts and what steps companies can take under the current circumstances.