The corona pandemic has increasingly negative consequences for the German and international economy. Due to the worldwide international economic interdependencies, but also national and regional measures such as border closings, bars, pubs, fitness studios, numerous companies such as automotive (suppliers) companies, companies from the trade fair, hotel and restaurant trade, holiday providers, freight forwarders and Shipping companies, pubs, bars, restaurants etc. have to contend with a considerable drop in sales, which could even threaten their existence, which the law firm Dr. Späth & Partner Rechtsanwälte mbB based in Berlin and Hamburg points out.
It is all the more important for affected companies and companies how they can legally protect themselves from this dramatic crisis:
The law firm Dr. Späth & Partner answers some important questions here:
1. International companies: Check supply contracts
Internationally active companies that trade with China or other countries, such as automotive suppliers, should always have their contracts checked, for example, to be free from delivery bottlenecks or to check delivery obligations.
It should already be checked here whether the trading partner is entitled to refuse performance in a country such as China or not. The decisive factor here is whether, for example, regulations on „force majeure“ have been made in the contracts concluded and whether these are effective or not, or whether general legal regulations, for example on the impossibility or loss of the business basis, are relevant and relevant are to be observed.
The first question to be asked is which right has been agreed at all and whether the regulations made are effective or not. In individual cases, for example, German law, Chinese or international law such as the United Nations Convention on Contracts for the International Sale of Goods should always be checked and what effects this will have on the contracts, i.e. whether the company or the contractual partner is released from the service or not.
2. Application for short-time work allowance
Companies and companies should also check whether, for example, applying for short-time work benefits is necessary and sensible. The Federal Employment Agency had made it clear some time ago that in the event of order bottlenecks due to the Corona virus, it is in principle possible to apply for short-time work benefits.
To do this, companies must contact the responsible employment agency.
The federal government had recently announced that the „Law on the temporary crisis-related improvement of the regulations for short-time work allowance“ should provide easier access to short-time work allowance, for example if a company is able to register short-time work if there are no orders due to difficult economic developments At least 10 percent of the employees could be affected by the absence from work (previously the threshold was 30 percent of the workforce). The Federal Employment Agency should in future fully reimburse the social security contributions that employers normally have to pay for their employees.
3. Check credit agreements and termination schemes
Companies and companies should also review their loan agreements, because, for example, § 490 (1) Civil Code on „extraordinary right of termination“ stipulates that if the borrower’s financial situation or the value of a security provided for the loan deteriorates or occurs significantly threatens to jeopardize the repayment of the loan, even if the security is exploited, the lender can always terminate the loan contract before payment of the loan, after payment, as a rule without notice.
Unfortunately it can be expected that numerous lenders such as banks will try in the next few weeks and months due to the negative economic effects of the Corona virus crisis (insolvency administrators have already announced that they are expecting numerous new bankruptcies from Corona) to make use of this right, for example, „termination without notice“, which could again bring numerous companies and companies into significant existential liquidity problems. Here, the borrowing company or company should always check whether or not there is a right to terminate without notice or whether, for example, milder means such as withdrawing the termination without notice or rescheduling through negotiations with the lenders can be considered.
4. Check other measures such as KfW loans, tax relief
In addition, affected companies and companies should always (have) checked whether they are not benefiting from further positive current measures, the Federal Government had already indicated that, for example, further relief such as tax relief, easier KfW loans, economic stimulus programs could be considered soon. Affected companies and companies should always check up-to-date and in individual cases whether they can benefit from these (possibly new) measures and how they can apply for them.
Conclusion: The Corona virus not only puts the health of the population to the test, but also the economy in Germany (and internationally). Companies and companies affected by the corona virus are welcome to contact Dr. Späth & Partner Rechtsanwälte mbB turn to check whether and which legal options exist to ease the negative economic effects of the crisis for the company or the company.
Dr. Späth & Partner have been active in business, banking, capital markets and consumer protection law since 2002, and thus for over 17 years.