CEU Electronic Theses and Dissertations, 2021
| Author | Akther, Moriom |
|---|---|
| Title | Impact of Covid-19 on the Contracts between US Buyers and Garments Exporters from Bangladesh: How to Rebalance the Equation |
| Summary | The thesis identifies the legal consequences of COVID-19 on the contractual relations between the US garments buyers and the garments suppliers from Bangladesh. The study finds that 1931 fashion brands canceled, delayed, or withheld 3.7 billion USD of orders since the beginning of the pandemic. The US is the top destination of Bangladeshi garments products, and the country is also in the top in terms of the number of buyers canceling orders from Bangladeshi sellers. Contractual relations between buyers and sellers are highly asymmetric, allowing buyers to use the force majeure clause to scrapping the order at their discretion. The findings of my analysis reveal that invoking force majeure in COVID-19 is not straightforward. Instead, buyers must show evidence that they have tried to overcome or avoid the consequences of the effect. In addition, COVID-19 does not restrict international fashion brands’ ability to pay, given the huge cashflow of those brands. Hence, the cancellation of contracts or refusal to pay is not justified on legal grounds. In such context, the study has provided some recommendations to improve future contractual practices: Amendment of the laws of the buyers’ and the sellers’ countries, establishment of an independent institution to ensure fair contractual terms and practices. Given the inequality of power between sellers and buyers, all sales contracts stipulated in the future should include an appropriate force majeure clause. The current business model could be changed in a way that makes parties more responsible toward contractual obligations. |
| Supervisor | Soave, Tommaso |
| Department | Legal Studies LLM |
| Full text | https://www.etd.ceu.edu/2021/akther_moriom.pdf |
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