INTRODUCTION
As we start a new year, COVID-19 cases are continuing to grow in India and other countries around the world. The spread of COVID-19 poses challenges to businesses and creating a huge impact on various industries, companies, businesses, organisations and giving rise to conflicts/ misunderstandings between parties to a commercial agreement, a rather new and a modern development called the online dispute resolution is on the rise.
This is relatively a very abstract concept and not a lot of legal firms have taken to this.
The ODR however has and follows a very unique working structure. The procedure involves mutual hearings through online platforms like yessettle, sama etc. Basically, it’s a method of using technology and web as a medium through which disputes are resolved.
However, the COVID-19 has paved the way for the online dispute resolution and has planted it’s rise. The online dispute resolution could be followed to overcome and deal with all the conflicts and misunderstandings that various organisations and parties to a contract have owing to non-performance of stated/ said obligations.
But the impact that the pandemic will have on the companies and businesses economically and legally, post the “coronatimes” would be huge and devastating
ECONOMICAL CHALLENGES
CHANGING CUSTOMER/ CLIENT NEEDS
The covid-19 has created a drastic change in the lifestyle of the society and the people. The advent of the social distancing and restricted outdoor activities/ work, the needs of the people are changing. people are no more willing to step out even to purchase barest necessities and they expect it to be delivered at their doorstep. The businesses that are also facing a crisis at this period, are not able to give what the customers actually require and were not prepared for this ultimately leading to low sales and low turnover.
CHANGE IN THE FUNCTIONING OF AN ORGANISATION
It is crucial that the organisations develop a dynamic way of working and operating at this time. Division of work and segregation of departments is not going to work. The employees of one department must be able to handle another department’s work and multitask irrespective of the nature of their job. Efficiency on the other hand, cannot be compromised. Any enterprise that is not capable of a dynamic management, control and adoption would fail and take a serious financial dip.
TECHNOLOGICAL DEVELOPMENT & COMPETITION
Technological Advancements and incorporation have always been on the rise and more so during these tough times. A lot of organisations are taking to adopt various technological mechanisms in order to increase their efficiency and ultimately it is always the most efficient that succeeds. Thus, it is important to notice various organisations, their operations and the use of technology in their systems, new technological advancements/ inventions and adopt the necessary to give the best and win. Failing in doing so, would lead to high competition and not witnessing success in the industry.
CONTRACTUAL CHALLENGES
NON PERFORMANCE OF OBLIGATIONS
The companies and organisations who are parties to a formal contract cannot perform all the obligations and duties due to COVID-19 and it may lead to revocation/termination of contracts. Irrespective of the force majeure clause that states that the parties to a contract would be excused from performing the stated obligations owing to an occurrence of an impossible event.Non performance of obligations by either of the parties still proves inefficiency and inability to perform leading to termination of contracts.
SUSPENSION OF CONTRACTS/ OBLIGATIONS
Difficulties may arise in performing the obligations stated in a contract and instead of taking to termination as mentioned above, parties may also go in for suspension of contracts. Suspension of contracts however makes it challenging for parties to perform the obligations owing to various reasons such as incapacity, financial burden and change in the working procedure/ structure.
CHANGE IN CIRCUMSTANCES
Post COVID-19, there could be a lot of changes. Circumstances and scenarios would have changed, revamps could be drastic and the businesses and organisations may even shut down completely owing to insolvency. Thus all these may lead to change in obligations, change in contracts or even dissolution of contracts due to its essentiality.
HINDRANCE TO NEW CLIENTS AND CONTRACTS
The formation of new agreements often depends on the credibility of an organisation. When there is proven inefficiency, even only with one client/contract, the other enterprises may hesitate to form new ones with the organisation or firm. uncertainties and doubts arise and as a result the firm may lose the opportunity and the client.
Apart from these kinds of challenges, these enterprises also face numerous issues with other businesses and customers.
B2B
B2B is a formal transaction between businesses, for example the transactions and agreement between a wholesaler and a retailer. While engaging in these business activities, the parties may often encounter various problems/challenges and more so in the present situation, where physical contact, meetings, effective functioning and normalcy is out of question.
1)UNFAIR MARKET PRACTISES
All the practises that give out false information allowing companies and organisations to be deceived pertaining to the decisions regarding sale, nature of product/ service or any major decision for that matter and Anything that restricts the freedom of choice to the other companies, organisations and thrusts influence, coercion and undue influence would be resorting to unfair market prices.
2)CONTRACTUAL FRAUD
Some agreements contain clauses that allow only one party to have complete control, discretion and power. These are agreements where only one party has complete monopoly. Some of the examples are:
* clauses that give only party to a contract to decide all the duties and obligations of the parties. There might be a chance that the party deciding dumps too much on the other.
* clauses that allow only one party to unilaterally decide the scope and the interpretation of a clause.
* clauses that exempt only one of the parties from liabilities or legal proceedings and make the other solely liable.
* clauses that provide rights only to one party to decide compensation , decide the outcomes in case of non-performance or delayed performance.
* clauses that give the right to shorten a contract, extend it or terminate it only to one party without a sufficient reason or cause is also clearly arbitrary.
All these unlawful, unfair and arbitrary clauses are framed by parties or businesses that have power and control, while the other party may not have so much influence or potential.
3) MISUSE OF ECONOMIC CO-OPERATION
The misuse of market power towards other companies and firms is restricted and will give rise to issues and disputes between B2B relationships. For example, a direct or an indirect obligation of unfair trades and commercial activities, a refusal to engage in business activities and unjust, inequitable territorial restrictions.
B2C
B2C refers to the process of selling directly to the customers, without the interference of any third party.Companies and organisations face innumerable difficulties in dealing with these kinds of transactions especially in the present times.
1)UNCERTAINTY IN CUSTOMER NEEDS – COVID- 19
The manufacturers and the service providers are very unsure about the present requirements of their clients/ customers. The lack of physical contact and meetings makes it difficult to understand the needs and wants of the customers. The manufacturers and service providers tend to make assumptions in producing these goods and services, they tend to go by their intuitions and are quite uncertain during the entire process. This may affect the productivity and at the same time may not please the customers/ clients.
2)CUSTOMER SATISFACTION – COVID-19 AND POST COVID-19
The quality of the product and service performed should never be compromised and anything short of the required standard for goods and services would make it substandard. Customers and clients duly value quality and no giving them that would be denying the customers their right. When the customer is not satisfied with the company providing the service or goods, they will not continue to deal/purchase from them and this will in turn affect the business of the manufacturers or service providers.
3)COMPETITION TO TRADITIONAL RETAILERS – POST COVID-19
The COVID-19 Is causing and bringing losses to various companies and enterprises especially with the advent of the e-commerce and the digital business world. Various small scale industries, small shops, industries, street dwellers are getting hugely impacted by this and cannot run their own enterprises as the people are opting for online shopping and delivery rather than to step out and put their lives at risk.This might continue to become a practice and even post-lockdown or post COVID-19 this might be the new avenue and trend.
BUSINESS TRENDS PRE COVID AND POST COVID- A COMPARATIVE ANALYSIS
The functioning of businesses and enterprises before the pandemic was physical and in-store. Businessmen invested in capital, infrastructure and space for showroom and window shopping, to provide a variety of options for the customers and to ensure a counter transaction. However, with the lock down restrictions imposed all around the world, it is impossible to for this form of business. Hence the online shopping and E- commerce has been the replacement for in store/ departmental shopping. Online business and delivery however, is very convenient in a lot of ways for both the businessmen and the customers and this may continue to be in prevalence even in the post pandemic period.
Remote functioning is another new, modern system that is gaining more prominence now. The concept of “work from home” was very rare and unique until the pandemic had begun. The beginning of the pandemic phase however made this a common practice. The office spaces, settings and venues will become an obsolete concept and soon this will be the practice even after the lock down is lifted.
Spending on luxuries has reduced and the concept of “wasteful expenditure” is certainly diminishing. People purchase only necessary items and the saving aspect is more on the rise now, owing to various employment and economical issues. Though this may affect the manufacturers and producers, it may be beneficial for the customers. This judicious mindset of the people and the increase in the savings amount may make this a permanent practice even after the pandemic.
The whole purchase procedure that was present, pre-covid19 was entirely different and involved contact, physical meetings and stepping out to shop or receive a service. But the entire system has been revamped and the entire process now takes place online. Customers can choose the apt website based on their needs e.g. big basket for vegetables and groceries, amazon for apparels and electronics etc. The customers can then select from a huge list of options, make the payment through online means such as G PAY, PAYTM, net banking etc. the items selected are then delivered at the address given for delivery. This non-conventional, convenient, relatively more commonly practiced system, paves the way for the post covid19 scenario.
Digital payments and online means of payment are the most common means of payment now and liquid cash is very gradually becoming an obsolete concept. Due to the coronavirus, people are afraid to deal with liquid cash both receiving the amount or receiving the change due to the spread of the disease. However,the online payment means/ method eliminated this issue. The use of ATM’S and the money printing devices might become obsolete and the digital transactions, digital business and the digital world is going to be more in prevalence.
These are some of the differences in the present system that might bring about a huge difference in the working of the entire system post the pandemic. Thus awareness about these aspects and taking appropriate measures to prevent losses or any difficulties is a must.
About the author –
This article is authored by Medhiyaa. Ramesh, 3rd year B.com, LL.B(Hons) student at Sastra University, Thanjavur, Tamil Nadu.
