The Contractual Balance Between 'Can I' and 'Should I'?

Unfortunately, many multinational buyers have responded with panic to the ongoing COVID-19 pandemic by exercising force majeure (‘greater force’) clauses in their contracts to abandon their suppliers, without regard to harm to their most vulnerable workers. Failing to identify and attempt to avoid or mitigate these impacts is at odds with their responsibility to respect human rights. My colleague Anna Triponel and I have addressed this immediate problem elsewhere.

However, underlying this immediate concern is the fundamental contractual question of how buyers can achieve the right balance between their desire to avoid involvement in supply chain human rights abuse, and their desire to protect themselves from liability. Just because a buyer can exercise a contractual clause does not mean that it should do so, particularly where the result will harm vulnerable workers. This issue preexisted the pandemic will remain after it is long past. This paper examines the efforts of the American Bar Association to strike that balance in the context of its proposed Model Contract Clauses on Modern Slavery and Child Labor.