Fiona Moss, Associate and Imanpreet Suthar, Trainee in our Corporate and Commercial team describe the legal implications for suppliers following road closures resulting from the recent burst pipes across London and a fuel spillage in Reigate Hill. Road closures are frustratingly inevitable but when this means disruption to, or loss, of business or perhaps causes a supplier to breach stringent delivery obligations, will the supplier be relieved from performance? Just over a week ago the A217 (Reigate Hill) was closed for 2 days for re-surfacing following a two-vehicle collision which resulted in 120 litres of diesel fuel being spilled. Across London, the burst water mains meant that roads were closed making many businesses inaccessible. Road closures such as this can cause problems for commercial suppliers in particular regarding the timing of delivery. Whilst practical advice is to keep abreast of traffic disruptions and seek alternative delivery routes, this is not always possible.
- If you are a supplier and have been unable to meet your delivery times, your contract will usually govern whether you are liable.
- If the contract states that delivery must happen at a specified time, this renders time of delivery to be ‘of the essence’. In other words, not delivering on time constitute grounds for terminating the contract, in addition to any other remedies available to the buyer (such as damages). Many suppliers seek to ensure that delivery obligations are specifically not stated to be ‘of the essence’ and so protecting their position if delivery is delayed by a reasonable amount of time.
- A well drafted agreement will also contain a ‘force majeure’ clause which effectively suspends a party from performing its contractual duties if certain events occur that are not within the their control. Depending on the wording, the unforeseen closure of a main road due to burst water mains or a fuel spillage could be a force majeure event, However, much will depend on the wording of the clause – many are limited to so called “acts of God” and if the parties wish to these types of event, they will need to be specifically expressed. A well drafted agreement or terms of supply can mean the difference between you being “on the hook” even where you are not on the face of it at fault or proceeding as usual once the disruption has ceased.
Above all, take specialist legal advice to ensure that your business is properly protected. For further information please contact Fiona Moss.