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Legal Advice During the Corona Pandemic: How Ecovis Legal Spain Can Help
“Force Majeure” and its practical application: a case study
After Spain declared a state of emergency, we first had to advise the customer on whether he was an essential service or not. As a multi-client logistics operator, this was difficult, as some of his end customers were essential but others were not.
Once it was decided which part of the operation could continue, we had to advise on how to deal with the part of the business that could not be carried out. Could rental agreements be changed unilaterally or payments be suspended? What would happen to employees? The client did not want to dismiss any staff, but they could no longer be fully employed. Therefore, we were forced to recommend a temporary suspension or reduction of employment hours.
Many questions also arose concerning contracts with suppliers and clients. Could customers simply suspend their contracts or terminate them? Did the client have to accept these decisions by third parties, or was there any room for negotiation? Could a customer impose a price reduction, or could a supplier try to unilaterally impose a price increase?
As in many countries around the world, the coronavirus emergency has also led to a lot of new government regulations in Spain. Some of these are positive (financial aid, deferral of tax payments, reductions in social security contributions). However, some of them are negative as they restrict the standard operating procedures of our client. Logistics is a very systematic business where everything must run smoothly. Thus, we also had to help our client to adjust to the new regulations.
Finally, the emergency has led to many payment issues on the side of customers. Our client also asked for our help to create strategies to deal with non-payments, reject the argument that the coronavirus situation had suspended the obligation to pay open debts and implement recovery strategies at a time when courts are officially closed, as well as a number of other issues.
Ecovis Legal Spain was able to help this customer because we advised strategically, knew the business and could provide advice on all legal matters.
For further information please contact:
Christian Koch, Lawyer, Partner, ECOVIS Legal Spain v. Carstenn-Lichterfelde Abogados, Madrid, Spain
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