Home Q&A Forum Can a party terminate an international contract if the other party fails to perform due to COVID-19 pandemic?

Trade

International Contract

California

Asked on May 13, 2025

Can a party terminate an international contract if the other party fails to perform due to COVID-19 pandemic?

Can a party terminate an international contract if the other party fails to perform due to the COVID-19 pandemic? I am a small business owner who entered into a contract with a foreign supplier to provide goods for my business. However, due to the global impact of the COVID-19 pandemic, the supplier has been unable to fulfill their obligations. I am concerned about the potential legal consequences of terminating the contract and the possibility of facing breach of contract claims.

Answers from 1 Lawyer

Answer

Trade

California

Answered 429 days ago

Hi, What you are likely looking for is a deep dive into your international contract's "Force Majeure" clause with a qualified attorney.

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What legal protections exist for me as a small business owner in the United States entering into an international contract?

As a small business owner in the United States, I am considering entering into an international contract with a supplier based in a different country. I am concerned about the potential risks and legal challenges that may arise from conducting business across borders. I want to know what legal protections exist for me in terms of contract enforcement, dispute resolution, and intellectual property rights, as well as any other important considerations I should be aware of before entering into an international contract.

View Dolan W.

5.0 (621)

Dolan W.

Answered Dec 31, 2024

Hello! My name is Dolan and thank you so much for coming to the site. So the contract itself is going to be the most important piece of protection. The law doesn't provide for specific protections for individuals or businesses entering into international agreements, but the contract itself, and its terms, are what you need to pay close attention to. If you are selling goods, then there are some rules that help clarify what AI said earlier. The first is the Contracts for the International Sale of Goods (called the CISG). The CISG applies automatically if both parties to the contract are located in countries that have adopted the treaty unless the parties specifically agree to opt out of it. It covers many aspects of a sales contract, such as the obligations of the buyer and seller, delivery of goods, payment, breach of contract, and remedies for non-performance. In other word, the CISG is kind of like a default set of rules for cross-border contracts unless you opt out of it, so knowing whether it helps or hurts your position is worth looking into. When it comes to intellectual property, be proactive. Just because you’ve got protections in the U.S. doesn’t mean they automatically apply abroad. Consider registering trademarks or patents in the country where your supplier is based to prevent them from using your intellectual property without permission. So what do I recommend you do? 1. Put in the contract what state is going to be the state for lawsuits (e.g. California); 2. Put it in writing! We can draft it up for you just let us know!

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Business Contracts

International Contract

California

Asked on Jun 27, 2025

Can a party terminate an international contract due to force majeure?

I am a small business owner based in the United States and I have recently entered into an international contract with a supplier in China to provide raw materials for my manufacturing process. However, due to the ongoing COVID-19 pandemic, the global supply chain has been severely disrupted, causing significant delays and making it impossible for the supplier to fulfill their obligations under the contract. I want to know if I have the right to terminate the contract based on force majeure and what potential legal consequences or liabilities I may face if I do so.

View Norman R.

5.0 (1)

Norman R.

Answered Aug 18, 2025

Whether an international contract may be terminated due to force majeure depends on whether the contract includes a "force majeure clause" that defines those events that are beyond the control of either party and would render contract performance impossible. Typical force majeure events could include, war, natural or man-made disasters, "acts-of-god", civil turmoil, etc. Disruptions to global supply chains due to the Covid-19 pandemic could be considered a force majeure event if it is identified as such in the force majeure clause of the contract. To determine the legal consequences and liabilities of terminating the contract the contract should be reviewed by a qualified lawyer to evaluate: whether supply chain disruptions due to Covid-19 qualifies as a force majeure event; whether there are notice requirements for declaring a force majeure event; whether the notice requirements (if any) have been properly satisfied; whether the Party declaring a force majeure event must take mitigating actions, etc. You should consult with a qualified lawyer to determine specific legal consequences and liabilities based on the actual terms of your contract.

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Startup

Terms Sheet

California

Asked on Mar 30, 2021

What are the most important things to look at in a term sheet?

I am expecting to get a few term sheets from investors in the next month. I want to know what I should be looking for.

View Ramsey T.

4.9 (5)

Ramsey T.

Answered Mar 30, 2021

Every term in a term sheet, by definition is important. A term sheet is a summary of the most important parts of a "deal" - a way of getting to and negotiating the hear of the deal before filling in the gaps with boilerplate. Therefore, you should make sure that you understand all of what has been proposed and negotiated in the term sheet - even the provision that don't seem that important - because they wouldn't be in the term sheet if they weren't a key term to one side or the other.

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Business

Master Services Agreement

California

Asked on Mar 31, 2021

What are the baseline terms I need in my MSA?

I am working on putting together a larger agreement that can cover everything that I do. I am a Digital Marketing agency and there are a lot of services we provide - Google Ads, SEO, backlinking, content writing, etc. I want to know what should go in my MSA.

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4.9 (61)

Donya G.

Answered Mar 31, 2021

Some of the baseline terms will be 1) services offered 2) time of delivery of the services 3) amount to be paid for the services 4) the responsibilities of the parties 5) what happens if the parties do not agree. DISCLAIMER The answers to these questions do not constitute legal advice and does not create an attorney-client relationship with the attorney and anyone who reviews these responses.

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Loans

Promissory Note

California

Asked on May 12, 2021

Is a promissory note legally binding?

I was told by my brother n sister that I would be able to borrow against my parents estate 20,000.00 to buy a trailer and car. This was my dad's wish. A trailer was bought for 13,563.95 and I was told I'd have to wait for car. I have medical issues and have to travel 45 miles either way to see my Drs so a car is very important. My brother executer and sister showed up yesterday saying they never said 20,000. and I'm only getting 15,000. They expected me to sign a promissory dated back in Nov 2020. I've always thought contracts should be signed before the fact not after. The money will be taken from my share of trust so why the note.

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5.0 (2)

Rebecca S.

Answered May 26, 2021

A promissory note is based on when the loan is made, not necessarily when the note is signed. So if the siblings actually loaned the money, regardless of when the note is signed, then a backdated note is ok. Review by an attorney is advised.

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Can a party terminate an international contract if the other party fails to perform due to COVID-19 pandemic?

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What legal protections exist for me as a small business owner in the United States entering into an international contract?

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