The latest China lockdowns seems endless, and the chaos in Chinese large ports made imports and exports extremely difficult.

When you find you can never predict the date of delivery from your Chinese supplier, you may consider to find another to replace and claim your loss at the same time. And just hurry up.

Long term lockdown has caused a lot of Chinese business shut down, especially for small businesses. Even if your supplier is big enough to survive from the hardship, the possibility of breach has risen to a new level.

If you happen have a sale agreement with Chinese suppliers at hand and the performance of each party hasn’t come to an end. You may consider the following measures to mitigate your own loss.

1 Suspend performance or avoid the contract based on Anticipatory breach

You may claim suspend your performance based on anticipatory breach before your date of payment is due and your Chinese partner’s business gets into trouble.

Under Article 71 of CISG, A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of:

(a) a serious deficiency in his ability to perform or in his creditworthiness; or

(b) his conduct in preparing to perform or in performing the contract.

A powerful argument for this article is that your supplier has become the debtor of some judgements with cause of action of breach of contract. With similar unfavorable decisions, the creditworthiness is affected serious. Therefore, you may suspend your payment.

But what if you have paid the price and are waiting for the shipment? Even if the date of shipment has not come, you still have the right to cancel the contract.

Under Article 72(1), If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided.

If the Chinese port you chose for shipment has been locked down for months such as Shanghai, and the date of shipment is upcoming and there is no way to predict the time to reopen. You can require to avoid the contract and claim your payment.

2 Force Majeure?

When the time is due as to the performance of your Chinese supplier, generally, after the Nachfirst Notice is notified, you have the right to terminate the agreement for fundamental breach from your seller. The liquidated damages or the direct damages at least would be available to get.

At this time, you may confront the excuses of force majeure. But from the practice of international trade contracts, the performance of the contract is the general principle, and the exemption or modification of the performance is the exception.

Although the Covid 19 has the unforeseeable, unavoidable or insurmountable characteristics of force majeure, Chinese suppliers cannot generally claim pandemic as force majeure and exemption from performance and liabilities.

For more, please read What If Your Chinese Supplier Rebuff Your Claim of Damages With Force Majeure?