Ireland:
Supply Chain Disruption
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Many of the supply chain issues have that have been seen in
other jurisdictions have also affected Ireland. Where supply chain
disruption arises and a party seeks to rely on a force majeure
clause, the relief available to that party will depend on wording
of the clause. As with other common law jurisdictions, a force
majeure clause must be included in a contract. In Ireland, there is
no legal presumption of force majeure and so if a contract does not
contain a force majeure clause, the Irish courts will not read one
into it.
The requirements that must be satisfied before a force majeure
clause may be relied upon will depend on the wording and proper
interpretation of the specific clause in question. It is important
to review the wording of the clause carefully to determine if it is
drafted in such a way as to cover the COVID-19 pandemic.
If a party wrongly relies on force majeure as a defense, it will
leave itself exposed to a claim for breach of its contractual
obligations and, at its most extreme, may see the counterparty
terminate the contract for breach and seek potentially significant
damages as a consequence.
The doctrine of frustration can also be considered and if found
to apply, frustration will bring a contract to an end. In practice,
however, the bar to bringing a claim in frustration is typically
considered to be very high.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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