Vaccine your contract, 2nd call
Consider in your contract what will happen if the contract is affected by health or financial calamities. Because you can no longer say “I didn’t see it coming”, and “daddy Judge” will hardly be able to modify or mitigate the contract.
At the end of last year it was warned in a publication that we are obliged to contemplate in our contracts “what if #COVID?” Because if the sanitary disasters wreaked havoc on us, we could no longer say “I didn’t see it coming” (López-Acosta, 2020). Well, that sanitary calamity and a new one (the financial one), are already making storm signals.
Covid-19
It is a fact that in recent days there has been an increase in cases of Covid-19. Both globally (“The rise of the delta variant puts Europe on alert”, 2021), nationally, and in Jalisco (“Hospitalization due to Covid increases 82% in Jalisco”, 2021).
Financial crisis?
Globally, the economy is recovering rapidly, unevenly and with fragility (“The new fault lines on which the world economy rests”, 2021). Global growth is at the level of the exuberant days of 2006.
In Mexico, this could generate an explosive cocktail: such overheating in the global economy, the inflation we are experiencing (“Inflación liga cuatro meses fuera del rango del Banxico; se ubica en 5.88% en junio”, n. d.), the “not so fast recovery” of the sectors that are not linked to exportation, and possible new restrictions due to an increase in the contagion of Covid-19.
All of the above elements would prevent the law from helping those who are contractually affected by Covid-19 or financial chaos (considering that the contract was signed “when the thunder of the storm was already sounding”). This time we will not be able to say: “I did not see it coming”.
Examples. Assuming that the contract was signed when the calamity was already rumbling:
1 The lease contract of a business, which is affected by the new closures ordered by the administrative authority to avoid contagion by Covid-19. It would be difficult for a judge to authorize the lessee to pay less rent for the affected premises (since it could have been foreseen).
2 The contract for the supply of goods (or service) at a fixed price, in which the cost of a certain product has skyrocketed. A Judge will hardly be able to authorize the modification of the sales price agreed in the contract, even if it is no longer profitable for the supplier (since it could have been foreseen).
Of course, if there is willingness between the parties, anything can be negotiated or modified. But if there is not and it is decided to go before a judge seeking the modification of the contract, the probability of success is low.
That is why if you are about to enter into a contract or with the possibility of renegotiating the current one, take a few minutes to think about what would happen in your business relationship if chaos breaks out. And prepare the respective agreements with your lawyer.
Of course, we are not obliged to consider any chaos (such as a foreign invasion or if the Laguna Verde plant has a Chernobyl-type accident). But we are obligated to consider the ones that have been lurking around for a while now.
The rise of the delta variant puts Europe on alert (2021, June 26). EL PAÍS. https://elpais.com/sociedad/2021-06-26/el-auge-de-la-variante-delta-pone-en-alerta-a-europa.html
Hospitalization due to Covid increases 82% in Jalisco (2021, July 12). Mural. https://www.mural.com.mx/hospitalizacion-por-covid-aumenta-82-en-jalisco/ar2219238
Inflation is out of Banxico’s range for four months; it is at 5.88% in June. (n. d.). El Financiero. Retrieved July 13, 2021, from https://www.elfinanciero.com.mx/economia/2021/07/08/inflacion-liga-cuatro-meses-fuera-del-rango-del-banxico-se-ubica-en-588-en-junio/.
López-Acosta, E. (2020, December 20). We don’t have the vaccine, but we do have the clause vs COVID. Lawyers without ties. https://abogadossincorbata.com/no-tenemos-la-vacuna-pero-si-clausula-vs-covid/
The new fault lines on which the world economy rests (2021, July 10). The Economist. https://www.economist.com/leaders/2021/07/10/the-new-fault-lines-on-which-the-world-economy-rests
