While five years have passed since 2020, the lingering effects of the global pandemic have continued to affect businesses across the world. The disruption in the supply chain wreaked havoc on several industries, as many manufacturers and companies were unable to reliably access the products they needed to complete and sell their goods and services. In recent months, uncertainties about tariffs have also caused real concern for businesses, especially smaller enterprises and family owned businesses. Both of these challenges have contributed to a notable rise in tariff-related disputes and force majeure claims from businesses looking for ways to keep their operations afloat during these uncertain times. Before the unprecedented complications that arose in 2020, force majeure clauses were generally invoked when unforeseen circumstances prevented businesses from fulfilling their contractual obligations. However, many businesses are wondering whether matters like tariffs will be covered under their current contracts that contain force majeure clauses. This has led to considerable confusion and anxiety for many Nevada businesses owners, which is why it’s worth taking some time to explore these topics in this current climate. 

At Reisman Sorokac, we believe in working closely with every client we serve to understand their specific concerns and goals. From there, we can help you identify the most strategic path forward that safeguards the best interests of you and your business as much as possible. We recognize that it’s a less certain time to be a business owner, but we are committed to providing you with the exceptional legal services you need to navigate each challenge with greater ease and face the future with confidence. Let’s take a look at some of the most common tariff-related contract issues in Nevada and the importance of renegotiating business contracts to ensure that they protect your business as securely as possible.

Understanding Force Majeure Disputes in Nevada

First, it’s helpful to understand what force majeure clauses are and how they typically affect business contracts in Nevada. Essentially, force majeure “is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing.” The key term is “extraordinary event,” which has become the subject of intense debate and scrutiny in recent years. Historically speaking, force majeure events are considered “acts of god” that “include both natural and man-made events like fires, floods, storms, war, and labor disputes.” However, it’s up to individual jurisdictions to determine whether a specific event constitutes an extraordinary circumstance, thereby triggering the applicability of the force majeure clause. It’s worth noting that the language of the force majeure clause in a business contract establishes its applicability. If you are involved in a contract dispute, the Nevada court will look at several factors to determine whether the disruption or event that prevents your business from fulfilling its contractual obligations is covered by the force majeure clause. To learn more about your options for resolving force majeure disputes in Nevada as smoothly and efficiently as possible, reach out to a highly qualified Nevada business dispute attorney to review your options.

How Tariff Increases Affect Business Contracts in Nevada

If it seems like tariff policies are rapidly changing, you are not alone. The implementation of tariff policies has been somewhat confusing for businesses, with reversals and modifications to recently launched tariff policies being announced on a frequent basis. In the midst of this uncertainty, many businesses are seeing significant effects on costs, delivery timelines, and supply chains. For instance, a business that relies on an overseas company for specific products may have to scramble to either find a new supplier or absorb the heightened costs of their current supplier due to new tariff policies. With each decision your business makes, you will have to review your existing contracts to ensure that the terms align with your most current needs and goals. For many businesses, tariff considerations can trigger contract renegotiations or other disputes that can benefit from the guidance of a trusted and experienced Nevada commercial contract lawyer. 

Legal Strategies for Handling Tariff Disputes

The process of renegotiating business contracts in Nevada takes careful consideration and attention to detail to ensure that your company’s best interests are sufficiently protected. Since economic hardship alone, which may include shouldering increased costs due to tariff policies, is unlikely to invoke force majeure, it’s worth seeing the counsel of a highly skilled and trusted business contract attorney to evaluate your options. It may be that your current force majeure clause is worded in a way that does afford you the protections you are seeking, or you may need to work with your legal counsel to explore alternative solutions. Depending on the specific circumstances of your situation, you may look into other doctrines like impossibility/impractibility or frustration of purpose. Or, you may decide to review and renegotiate your current contracts to account for these more pressing challenges to your business operations. Should a business dispute arise, your business attorney can help you move through the mediation or arbitration process to arrive at a fair outcome. While litigation is often viewed as the last resort option, it may be the most appropriate course of action to ensure that you obtain the just outcome you deserve. No matter what path your case may follow, you can trust that the team of highly experienced and knowledgeable attorneys at Reisman Sorokac will remain by your side to advocate on your behalf at every opportunity. 

Frequently Asked Questions (FAQs) About Renegotiating Business Contracts in Nevada

As overwhelmed as you may feel right now, it’s essential to understand that legal guidance is always available to help you move forward with greater confidence. If you are in need of supply chain disruption legal advice or guidance for how to renegotiate the terms of your current business contracts, reach out to Reisman Sorokac at your earliest convenience to get started with a knowledgeable and trusted business law attorney. Together, you can address common questions about business contracts in Nevada (a few of which are displayed below). 

Does a Tariff Increase Automatically Trigger Force Majeure Protection?

No, it depends on the contract’s exact wording and the severity of the impact.

Can a Business Renegotiate Contracts Solely Because of Increased Costs?

It depends on the contract terms, but price increases alone often don’t excuse performance unless a clause provides for it.

What Should Nevada Businesses Do if they are Affected by Rising Tariffs?

Seek legal counsel right away to review your contract options and explore potential mitigation strategies. 
When it comes to protecting your business, you deserve high quality legal services that are tailored to address your specific needs and goals. Reach out to Reisman Sorokac today at (702) 727-6258 to get started with an experienced and knowledgeable Nevada business law attorney.