Delayed shipments are another frustration people face during COVID-19. Find out what rights you have here.
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COVID-19 has affected all facets of our lives worldwide. In fact, in addition to causing a global health crisis, COVID-19 has caused massive logistical problems around the world, especially with the delivery of goods. Governments and suppliers have imposed border closings, freight restrictions, and strict quarantine requirements on imports. As a result, late deliveries have become the norm in recent months. You may have ordered something that is taking months to complete. Or maybe you’re a supplier struggling to get your goods to customers. If so, you may want to know what your rights and obligations are for delays caused by COVID-19. Here we will outline those rights and obligations for late deliveries at the time of COVID.
Australian Consumer Law Rights for Late Deliveries
The Australian Consumer Law gives consumers certain guarantees that suppliers must comply with. This includes the guarantee that suppliers deliver products ordered by the consumer within the agreed period. If there was no agreed time, the products should be delivered “within a reasonable time”.
What is “reasonable time”?
The Australian Competition and Consumers Commission has recommended that the “reasonable time” should be longer than usual due to COVID-19. As a result, the ACCC expects consumers to be more lenient with companies facing late deliveries. However, suppliers should inform customers when they can expect to receive the item. You should also clearly state any possible delays that may occur before customers purchase items.
What if the delays are way too long?
If you are a supplier and you have not been able to deliver the goods in the specified timeframe or in a “reasonable time”, you should remedy your customers. This includes providing various goods as replacements when they can get to them more quickly. You can also request a refund of the money paid by the customer for the goods.
Are suppliers liable for other losses?
Customers can also claim other damages or losses caused by the supplier’s failure to deliver. For example, the customer’s own store may not receive critical deliveries due to late deliveries that affect their business. You can then try to claim your losses from the supplier. However, customers can only assert this if the loss was “reasonably foreseeable” for the supplier. In addition, suppliers will not be liable for any loss suffered by customers if their failure to deliver is due to “a cause unrelated to human control that occurred after the goods left the supplier’s control”. While there are no such cases before the Court of Justice, COVID-19 could indeed fall under the definition of a “cause beyond human control”.
Other remedies for late deliveries
Australian Consumer Law aside, there are legal remedies that may be available to buyers and suppliers. This includes the contractual remedy against force majeure and the principle of frustration. These principles are likely to be more relevant for large orders for the delivery of goods.
If there is a force majeure clause in a delivery contract, this can be triggered by the buyer or supplier if delivery is not possible due to COVID-19. The clause simply specifies which party must bear which costs and liabilities in the event of a force majeure event. A Force Majeure Event is an unpredictable, extraordinary event that is beyond the control of parties. It is therefore not possible to fulfill the contract.
Parties cannot imply “force majeure” in contracts. Therefore, this remedy is only effective if the contract expressly contains this clause. Whether the force majeure clause covers COVID-19 also depends on how the clause is worded. Some clauses explicitly state what types of events are handled in the clause; B. government restrictions, war and natural disasters. The parties would need to determine whether the force majeure clause covers COVID-19 or the consequences of COVID-19 (e.g. government restrictions). If the clause does not clearly define which events are force majeure events, it may be easier to determine that COVID-19 is a force majeure event. It is important that the result of the event must be that the delivery has become impossible, not just delayed or difficult
Frustration is similar to a force majeure event. An event is a frustrating event in which, due to unforeseen circumstances, it is impossible for the parties to perform a contract or it is radically different from the expectations of the parties. As with events of force majeure, it will not be sufficient that the fulfillment of the contract is merely more difficult or delayed. However, if the contract already contains a force majeure clause, the parties cannot rely on frustration.
The frustration results in the contract being terminated at the time of the frustrating event. Accordingly, the frustration releases the parties from any obligations they had under the contract after the frustrating event. You are still responsible for any behavior prior to the frustrating event. The parties incur the losses for any work they did prior to the frustrating event. You cannot sue the other party to make up for these losses.
Difference between force majeure and frustration and when to rely on them
The difference between force majeure and frustration is that a force majeure clause is an agreement that the parties have already negotiated how they will bear the losses in the event of an unforeseen event. Frustration, on the other hand, effectively forces the parties to take the losses where they fall.
Parties to a supply contract should consider whether it would be beneficial for them to trigger a force majeure clause, if it exists, or to rely on the principle of frustration. For example, if you are a supplier and the force majeure clause affects your interests, you can try to avoid triggering this clause. Suppose you have already suffered a lot of losses in preparation for the delivery of goods. These losses can be made up if government restrictions are lifted in the future and the offering can continue. In this case, you can avoid relying on the principle of frustration as it will terminate the contract.
Not only has COVID-19 sparked a global health crisis, it has affected other important functions of society such as the delivery of goods. Undoubtedly, this has added to another frustration that you struggle with in these uncertain times, whether you are waiting for new clothes to be delivered that you have ordered or whether you are a business owner, depending on the items being shipped, to make a living. Here we have listed some rights and obligations that you as a consumer or supplier may have during COVID times. You can consider whether legal remedies for resolving legal disputes and for dealing with another, unnecessary element of uncertainty are available during this period.