Addressing Tariff-Related Risks in Commercial Contracts

This guide discusses the legal considerations surrounding tariff-related risks in commercial contracts. It outlines the challenges companies face due to ongoing tariff uncertainties and the implications for force majeure clauses and common-law defenses such as impossibility, impracticability, and frustration of purpose. The document details relevant case law, including decisions from federal courts that emphasize the necessity for specificity in contract language. It highlights that common-law defenses are more likely to succeed under certain conditions, such as lack of prior notice of tariffs or when the tariffs completely defeat the contract's purpose. The guide also presents key takeaways for companies drafting or revising contracts to effectively address tariff-related risks, stressing the importance of clear language that specifies how risks are allocated. Overall, the document serves as a resource for understanding the legal landscape regarding tariffs and their impact on contractual obligations.