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Understanding orders

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The news last week highlights the horrific situation facing many growers. The dramatic fall in sales arising from the lockdown coupled with the perishability and seasonality of plants means the sector faces a nightmare scenario.

Within the news there are numerous references to ‘orders’ being lost or cancelled. But ‘orders’ is often a misunderstood expression and it is vital to check the contract.

It is possible that such orders really are contractual obligations to buy which have been breached but they might not be. They may be subject to an overarching Supply Agreement which requires another step before a contract is in place, such as a confirmatory Purchase Order which is only issued shortly before delivery.

However it is possible that some growers do have enforceable contracts in which case there will be other issues to consider such as force majeure clauses (if any), or any similar clause relating to events outside the reasonable control of the defaulting party or other contractual principles relating to the frustration of contracts.

A true understanding of the contractual situation is an essential starting point and if you would like us to take a look and consider your position, please contact one of our corporate and commercial team.