To highlight the wider impact on the economy, Finland's paper industry accounts for one-third of its exports and 15% of the world's total production of paper. Therefore, the businesses involved, such as UPM, Sappi and Stora Enso, have ground to a standstill as production and deliveries have been delayed.

However, this recent state of affairs has demonstrated the benefit of having written purchase terms in place that have clauses to deal with situations outside of a party's control and make it clear what should happen in an event like this. 

So, if you can't deliver to clients because you can't get the paper or you are going to be late, then what's the legal position? What rights does your customer have against you and what rights do you have against the paper supplier who can't get the paper to you? Well, that actually depends on the contractual position.

Knowing where you stand
If you have no contract terms in place, you will not be relieved of your obligations under the contract with your customers, as there was no clause agreed at the outset providing for situations where non-performance is excused. Therefore, it is likely you will have to pay financial compensation to the customer. In certain circumstances, the doctrine of ‘frustration' may apply, which allows the contract to be automatically brought to an end if and when an event occurs making performance of the contract impossible. But as paper can be bought elsewhere, it is unlikely to apply.

The same applies if there are no contract terms in place between you and your supplier, as the supplier will find itself in breach of the agreement with you, the printer, if it doesn't supply within a reasonable time of the date required; although, at the time the breach occurred, the supplier could do nothing to prevent it. You should be entitled to compensation from the supplier unless they can claim that the contract is somehow frustrated.

If you do have a written contract, then it's likely that you may have what lawyers know as force majeure provisions. If so then the position is likely to be different. The supplier will not be held responsible for a failure to perform its obligations as an unexpected event has prevented it from carrying out its side of the bargain, for example, an earthquake or natural disaster. Such clauses are useful to include in contracts.

As the customer, you should check the delivery contract because a supplier usually has a clause allowing him/her to break the contract when there is a force majeure event. So, negotiating a strong clause at the outset will have the effect of holding the supplier responsible for almost any intervening event. This gives the supplier a financial incentive to take sensible precautions to avoid any delay in delivery.

In summary, there are several advantages to clearly setting out in the contract what is to happen on the occurrence of an unforeseeable event. Firstly, it will allow you to allocate risk.Secondly, well set out procedures result in a higher degree of predictability. The worst scenario of all is where your supplier has a force majeure clause in its contract with you, but you don't have a similar one with your client. In this circumstance, you are left picking up any financial consequences yourself and the supplier can probably still require you to take delivery after the force majeure event ends, as the contract may just be suspended and will begin again once the unforeseen circumstance has passed.

Finally, to cover all bases and protect your business operation, it may be useful to include a catch-all provision covering all eventualities.

Philippa Dempster is a partner and head of commercial services at law firm Freeth Cartwright.