Prevention as a Solution of the Industry in the Event of Breach of Obligations by Government Measures decreed due to the COVID-19

Dear Clients and Friends:

Without any doubt, the declaration of Health Emergency by Force Majeure due to the epidemic generated by the SARS-CoV2 virus (COVID-19) decreed by the Mexican government and, as a consequence, the immediate suspension of non-essential activities from March 30^th to May 30^th, have caused several challenges and raised questions for companies in our country related to the compliance or non-compliance of their contractual obligations towards their commercial partners and the consequences that this may bring. Due to this,prevention is the best possible solution to reduce the risks and legal consequences. Therefore, we recommend that companies carry out an exhaustive revision of their agreements to see the mechanisms or tools that the contract itself may contemplate for said purpose and, in the same way, in the absence of tools or mechanisms in the contract, attend to what that the applicable law states for each particular case.

Unpredictability, force majeure or acts of God, among other legal figures, could be invoked in some cases. It all depends on the type of agreement and the applicable legislation to that contractual relationship. Hence the importance to review the specific case of each company as a first measure, in case of an eventual impossibility of complying with your obligations. This will allow finding the contractual or legal mechanism that puts you in the best feasible scenario in the event of such eventualities.

The breach of obligations, notwithstanding their imminent actualization, cannot occur in an arbitrary manner, meaning that, if applicable, you must have the necessary documentary support to mitigate or eliminate the corresponding commercial and legal consequences.

By virtue of the foregoing, we invite you to contact us to help you implement the adequate prevention measures for your company.