Material suppliers 'over-using force majeure'
July 7, 2010
Force majeur has been an over-used and under-justified concept by companies supplying materials to packaging producers according to the Industrievereinigung Kunststoffverpackungen in Germany. The organisation says that while over the last few weeks packaging companies have experienced full order books, and have a promising third quarter, the industry is less satisfied with the disproportionately high cost of raw materials as well as the shortage of certain primary materials. The IK says that the clients of plastic packaging producers "have lost their patience with the current situation."
The situation has been made worse by "the numerable force majeure notifications" over the last six months and the IK says that the wording of some of the notifications does not always meet the requirements for a force majeure.
It argues that European jurisprudence has a very narrow definition of the term "force majeure" – "according to this definition the situation has to have an exterior cause, an 'act of God'. A mere assertion of technical problems with the equipment is not sufficient."
The IK says that failure to deliver materials cannot in general be classed as force majeure unless the failure of delivery is caused by an act of God. So the responsibility lies with the supplier, and commercial due diligence requires precautionary measures to be taken, for example contingency plans or the availability of storage facilities.
The organisation points out that European plastics processors have a considerable influence over the sales results of the raw material producers, and that for successful co-operation to continue there should be a safe supply chain throughout the raw material industry in addition to stable material prices.
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