Date of Defense

4-21-2023

Date of Graduation

4-2023

Department

Business - Interdisciplinary

First Advisor

Sime Curkovic

Second Advisor

Timothy Eagle

Abstract

This thesis explores the legal and practical implications of the COVID-19 pandemic on joint ventures, focusing on the impact of force majeure clauses and supplier-buyer relationships. Drawing on insights from real-world professionals, the study examines the evolving perspectives on whether COVID-19 constitutes a force majeure event that affects supplier-buyer relationships in joint ventures. While the majority of professionals initially regarded COVID-19 as a force majeure event that significantly impacted these relationships between 2020 and 2022, dissenting views have gained traction in 2023.

Examining the legal framework and precedents, the research reveals that courts interpret force majeure clauses based on the parties' existing agreements. Although common law doctrines such as impossibility, commercial impracticability, and frustration of purpose may apply, courts generally defer to the specifications outlined in the force majeure clause of a joint venture agreement. Recognizing the pandemic as a force majeure event, courts evaluate each case on its individual merits as circumstances evolve. Parties are advised to thoroughly analyze their force majeure clauses, gather substantial evidence to mitigate nonperformance, and consider invoking doctrines of impossibility, commercial impracticability, or frustration of purpose to secure the right to excuse nonperformance.

The COVID-19 pandemic has significantly disrupted the global supply chain, affecting all stages from suppliers to consumers. Increased demand for essential goods, coupled with production and manufacturing bottlenecks, has resulted in reduced productivity and extended lead times. Logistics and transportation challenges have further exacerbated the situation, causing delays and shortages in the distribution chain. Consequently, end consumers have faced limited supply levels and soaring costs of essential goods, leading to panic buying. Moreover, the pandemic has dampened the demand for non-essential goods, leading to revenue losses for suppliers, manufacturers, and distributors.

Furthermore, this thesis compares the perspectives of legal/compliance professionals in Indonesia with those of supply chain management professionals in the United States. Several factors influence the viewpoints of these two functional areas, including legal systems, COVID-19 policies, and economic conditions. The analysis reveals that civil law nations, such as Indonesia, have a simpler process for invoking force majeure clauses. Additionally, while most countries experienced similar circumstances during the pandemic's outbreak in 2020, their diverse economic and political histories influenced the speed of their recovery from the COVID-19 pandemic.

Overall, this research sheds light on the intricate relationship between the COVID-19 pandemic and joint ventures, examining the legal aspects of force majeure clauses and the practical implications on supplier-buyer relationships. By understanding the legal framework, industry professionals can navigate the challenges presented by the pandemic and develop effective strategies to mitigate risks and ensure business continuity in joint ventures.

Access Setting

Honors Thesis-Open Access

Additional Files
Rebecca Presentation.pdf (10275 kB)
Defense Presentation
Download

Share

COinS