2021 TSMA

37 the market. These are basics, but they are quite frequently overlooked according to my experi- ence. Contracts are nothing but a risk management instrument. They can remain on the shelf in good times, but prove their quality and value if times become tough or substantial controversies occur between the respective contract parties. Right now, some long-term relationships are strained, or may even go sour. If they are termi- nated, clear contractual rules about the concrete consequences of such terminations can save substantial amounts of money. The risks that the financial soundness of a purchaser of goods may quickly detoriate or may even ultimately lead to insolvency are sharply increasing. Let me provide you in this context again with one very concrete and practical example: To get into the repossession of an existing inventory of unpaid goods upon termination of a supply relationship or in case of nonpayment may become very cumbersome, if not impossible, in the event that no clear contract provisions exist how to properly deal with these scenarios. For example, if a con- tract does not foresee that the terminated party being in possession of the remaining inventory is allowed to access to the premises where such goods are stored, any unilateral attempt to enter the premises and get hold of the goods may well be interpreted as trespassing property in an unlawful manner. It could even expose the other party to sanctions and fines on the grounds of criminal law provisions. Another major benefit of a professionally worded contract is that its legal provisions are in most instances not challenged by judges and arbitrators - at least in the more civilized countries – unless they violate mandatory applicable laws. It is then sufficient to point with a finger at a certain clause, how a certain issue should be resolved, instead of spending sometimes unreason- ably high amounts of legal defense costs and by binding company resources in litigation pro- ceedings that might take several years until the final judgment can be obtained, if at all. Quite frequently, it is very uncertain who will prevail in such kinds of disputes, not to mention all other negative effects and frustrations that such controversies might have for the business relationship between commercial operators as such. Preventive state-of-the-art contracts and a professional supply chain management should be part of the general risk management policy of a company, and in times like these it is clearly proven that those entrepreneurs, who have done their home-