2021 TSMA

38 2021 Taiwan Sporting Goods Manufacturers Association work sufficiently in advance before major problems occurred are enjoying a significant competitive advantage over others. Some Observations and Recommendations Be- yond the Pure Legal Aspects “United we stand, divided we fall” this is a quote, which goes back to the 18th century and is of US origin (and has e.g. also been used by Pres. Abra- ham Lincoln in his attempt to get rid of slavery) describes best in my opinion, what it is all about in these difficult times, which ask for solidarity, cooperation and also flexibility within supply chain relationships. It certainly cannot harm if a party knows its contractual position and what it could do in a given situation by looking at it from a pure le- gal level. Yet, the right to exercise a certain right, does not mean that it should be exercised by all means, regardless how much it will damage a business relationship between two or several parties. To be entitled to do something, does not im- ply that a contract party facing difficulties and disruptions at supply chain level or in other cases should quasi-automatically trigger the contractual buttons and exercise all rights that it may have based on the related agreement(s) in place. Crisis management also requires solidar- ity to jointly weather the storm, without insisting in any event on a formal contract position. Yet, the fact alone that such rights exist may very well considerably improve the bargaining position of a contract partner to renegotiate the agreement, to adjust existing terms – even for a preliminary period – or to suspend/waive certain otherwise ex- isting obligations. Several clients of mine have e.g. temporarily opened up new distribution channels, such as the (temporary) permission provided to their retail customers to be present on certain on- line platforms that were closed prior to the Covid19 crisis on the basis of existing selective distribution agreements. Others changed their distribution policies by cre- ating their own B2C online stores, some with and some without the involvement of their retail cus- tomers. Further issues have arisen where a brand wanted to terminate the existing relationship with certain retailers after having obtained information on a financial deterioration of these B2B customers (some directly related to the shutdown of their retail stores, others indirectly because they were already facing financial difficulties prior to the cur- rent crisis). In these cases, I have been asked wheth- er and under which conditions it would be possible to terminate the relationship with immediate effect, or if not, which prior notice periods would have to be observed for an ordinary termination.