P2P

23 I L T A N E T . O R G modify the impacted party's performance or the right to temporarily obtain goods or services from an alternative source. We reviewed each agreement to determine how often a party had a right to terminate an agreement based on a force majeure event. 4 Across agreement types, our results showed that those reliant on delivery or performance, such as commercial contracts and sales agreements, had the highest occurrence of termination rights for force majeure events. In contrast, leasing, licensing, and finance agreements had a much lower prevalence. The results across industries showed similar results. Contracts in the supply chain, such as logistics and manufacturing companies, had a significantly higher occurrence of termination rights for force majeure events at just under 40% for both contract parties (compared to 12% for the entire sample). The number of days a force majeure event had to continue before this termination right was triggered varied widely: 2. This sample included six agreements from 2020 (of which three agreements had such pandemic-specific language), with the last agreement dated February 28, 2020. Consequently, it is possible that COVID-19 may have had a small effect on these results. 3. Under the UCC, business-to-business sellers can avoid breach for non-delivery or delayed delivery if performance is made impracticable due to the occurrence or non- occurrence of an event contrary to a basic assumption of the parties or because of a government regulation or order. In the current situation, suppliers may claim, for example, that a significant amount of their workforce is infected with COVID-19 and, therefore, they have limited production capacity, or that state lockdown orders have prevented their workforce from reporting for duty. Under the doctrine of excuse, business-to-business sellers cannot simply fail to perform, however. The UCC requires that they allocate production and deliveries among their customers to the extent possible. Sellers must then notify their customers in a timely manner that they will not be able to deliver as required under the contract and also inform them of any allocated quota they are able to deliver. Most states have adopted the revised UCC, but parties should check the relevant UCC in the state identified as the governing law of the contract. 4. These results only cover explicit termination for a force majeure event, excluding "termination for convenience" clauses generally.

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