The follwing information is not intended to be exhaustive, and we encourage you to seek advice – legal or otherwise – if you have questions to specific situations.
1. General meetings
Q: We are to hold our annual general meeting and we are expecting the number of participants to exceed 10 persons. Can we cancel, postpone or how should the general meeting be conducted?
A: Annual general meetings must be held in time for the annual reports to be filed with the Danish Business Authority no later than 5 months after the end of the financial year. It would under normal circumstances not be possible to postpone the annual general meeting beyond said deadline. However, for companies not able to hold general meeting electronically, which requires adoption at a general meeting and description in the articles of association on procedures in that respect, it has been decided to temporarily dispense with the deadline for annual reports until 8 weeks following termination of the assembly ban. The temporary dispensation applies to companies with more than 10 shareholders not able to hold electronic general meetings.
Q: We have sent out notice to convene our annual general meeting as usual, i.e. with physical participation of shareholders, chairman, management, etc. Can we hold the meeting electronically?
A: In order for general meetings to be held only electronically a decision to do so must be made at a general meeting and included in your articles of association. If that requirement is fulfilled, the notice to convene the general meeting must include information that the general meeting is to be held electronically as well as information for the shareholders on how to register for the electronic meeting and where they may find information on the procedure for electronic participation. If that requirement is not fulfilled the general meeting must take place with the possibility for the shareholders to participate physically, though many must be expected not to do so. Alternatively, a new notice to convene should be sent. It should also be noted that it is possible for the central managing body of a company to decide to hold a general meeting partly electronically. This means that the shareholders must be given the opportunity to attend in person or electronically. Information must be included in the notice to convene the meeting.
2. Travel bookings
Q: Our company has booked a package trip abroad in connection with a conference for our company. Can we cancel the booking?
A. This will initially depend on the terms you agreed on with the package travel provider, i.e. typically the contents of the package tour provider's standard terms. Furthermore, the issue will be regulated by the Package Travel Act (in Danish: Pakkerejseloven) and the Package Travel Appeals Board's (in Danish: Pakkerejseankenævnet) practice. It follows from this practice that it will be possible to cancel your trip 7 days before departure if the Ministry of Foreign Affairs advises against unnecessary travel to the area to which you have planned to travel. The Travel Guarantee Fund's (in Danish: Rejsegarantifonden) coverage becomes relevant only if the travel provider goes bankrupt. The Fund has stated on their website that if you receive a voucher/gift card as compensation for the travel that has been canceled, you will be covered by the Fund's coverage should the travel provider go bankrupt at a later date. Therefore, all documentation regarding the canceled trip, including documentation of payment, should be kept.
3. Delivery of goods
Q: We sell goods made in China that have not been delivered to us due to the corona virus. Our products are therefore currently being delivered with great delays to our customers. We are not able to have the goods produced elsewhere than in China. We have no written agreements with our customers. Can our customers make a claim against us?
A: If your goods are not specially adapted to the customer and thus what we call "generic goods" (in Danish: genusvarer), it follows from the rules of the Danish Act on the Purchase of Goods (in Danish: Købeloven) that you can be exempt from liability if the delivery is "... excluded by circumstances that are not of such a nature that the seller should have taken them into consideration at conclusion of the purchase, such as by accidental destruction of all objects of the kind or lot to which the purchase relates, by war, prohibition of import or the like." In general, it is difficult to apply this provision, but we believe that if the delivery is in fact not possible, it may be possible to invoke the Act towards your customers thus avoiding claims. It should be noted that the issue will be more complicated if the contracting parties are situated in different jurisdictions as it would then initially be necessary to identify which country’s law would apply.
4. Cancellation of future orders
Q: We supply goods to retailers in Denmark. Our agreement covers the delivery of goods for Q1-Q4 2020. Now, one retailer has cancelled orders for Q4 claiming force majeure due to current drops in sale and hence an “uncertain financial situation”. Can they do that?
A: First, it is relevant to look at the parties’ agreement. Does the agreement deal with cancellation of already placed orders in the given situation? If the contract does not specify how to handle this situation, it is relevant to consider whether the situation is in fact a force majeure situation. To establish force majeure, the retailer must be able to demonstrate that the event is (i) unpredict-able; (ii) occurred beyond the party’s reasonable control; and (iii) makes the fulfilment of the contract impossible. The general view is that the fact that a contractual obligation becomes more expensive or time consuming to fulfil does not per se amount to a contractual obligation being impossible to fulfil which is one of the requirements to establish a force majeure situation. Even if the situation would qualify as force majeure, it is important to note that the event does not automatically free the party from its obligations, but it merely suspends the performance until the force majeure event ceases. It should be noted that the issue will be more complicated if the contracting parties are situated in different jurisdictions as it would then initially be necessary to identify which country’s law would apply.
5. Entering into new supplier agreements during the epidemic
Q: In contracts with many foreign suppliers for the delivery of goods to us timely delivery is important. We are looking to ensure that in our new supplier agreements, we can cancel orders not being delivered on time, especially due to the corona-virus. How do we do that?
A: It is important to note that most force majeure-clauses are only effective if the force majeure event is not known to the party at the time of entering into the agreement. Consequently, if entering into supplier agreements during this time where timely delivery can be uncertain due to the corona-virus closing down production and regular supply routes, it may be considered to insert specific clauses in the agreement governing events where the buyer (i) becomes aware; (ii) suspects; or (iii) is notified of a failure to delivery by the supplier due to e.g. existing outbreaks of diseases (explicitly including the corona-virus), and may as a result be allowed to cancel orders without incurring liability. Additionally, it may be considered how to regulate the allocation of costs in the event that delivery becomes vastly more expensive (e.g. as goods must be shipped by truck instead of ship or plane), goods are delivered to late or early (e.g. causing increased expenses towards storage or breach of agreements with the buyers’ buyers), and otherwise.
6. Deliveries to public institutions
Q: I deliver canteen food to public institutions that are closed down and will not pay. Can I claim compensation?
A: The possibility of claiming compensation will depend on the terms of the public procurement under which you provide the food, including whether the public institution has committed to stay open for a certain period during the year.In addition, close attention should be paid to the aid packages provided by the Danish government, where there may be help to be had.
7. Royalties
Q: I supply films to cinemas. The cinemas are closed down and will not pay royalty. Can I claim payment?
A: This will depend on the terms you have agreed upon with the cinema in your distribution/licensing agreement.
8. Subscriptions
Q: We have subscribed to a fitness chain for all our employees. The fitness chain is closed. Can I claim a refund?
A: Under the current legislation you are entitled to a refund for the period in which you are not able to use the subscription. However, it is possible that the government will introduce new legislation that changes the current rules. Therefore, our recommendation is to wait and see what happens.
9. Employment
Q: We are planning to send all or most of our employees home and make use of the governmental salary compensation scheme. One employee has only been with us for two weeks and is thus within her trial period. May we terminate her employment?
A: It is a prerequisite for receiving salary compensation that the company during the period when the company receives salary compensation does not dismiss employees for financial reasons, i.e. to save salary costs. It will however still be possible to terminate employees for instance due to non-performance but great care should be taken to be able to document such non-performance.
