For the third consecutive month, Natalia Samodina, Client Legal Director at the law firm The Legal Director, is coming back to BigFurnitureGroup, this time examining practical strategies furniture and furnishings businesses can employ to navigate crises.

While the article was prompted by the recent US tariffs and their disruptive impact, the insights offer adaptable solutions for crises of any origin.

The last 10 years have handed us an abundance of crises – a global pandemic, geopolitical tensions, armed conflicts, political musical chairs and cyber-attacks to name but a few – all contributing to supply chain chokepoints and stressed businesses.

Some businesses – typically the better-resourced ones – have employed their pre-existing risk management tools and have weathered multiple storms reasonably well, others have struggled, putting out one fire after another with mixed success – cases in point Made.com, Carpetright and Joseph Furniture.

Kudos to those businesses who have comprehensive business continuity plans which can be rolled out at a moment’s notice. To the rest of us – when you see that iceberg coming right at your Titanic – it’s crisis management time for now and an opportunity to plan for the next one.

ANOTHER DAY, ANOTHER DISASTER

Post-Liberation Day sky-high US tariffs hit like a full-blown migraine, rocking global trade. According to BigFurnitureGroup’s recent survey, as of February 2025 British furniture exports remain strongest in the EU and the US (coming second), while China dominates imports.

While exports to North America are rising, EU-bound shipments are slipping, and China’s share of UK imports keeps growing. No wonder the tariff shock sent currencies, stocks and businesses into a tailspin. While EU-bound shipments are slipping, exports to North America are rising and China’s share of UK imports keeps growing.

Since then, things have calmed down – slightly. Vis-à-vis China, while the 90-day truce lasts, most imports will face the base tariff of 30%. However, additional tari􀆯s might apply to specific components, e.g. steel and aluminium, at 25%. The future UK-US trade deal removes 25% tariffs on UK steel and aluminium, but the zero-tari􀆯 quota remains unspecified, and finished goods still face a 10% tariff.

Meanwhile, the EU remains a safer bet under the UK-EU free trade deal, with further strengthening likely post May 19 summit – although the UK must carefully balance US and EU interests.

TAKE STOCK

While US tariffs remain in place, a granular assessment of customs rules of origin (ROO) will help to clarify their impact on business models. In this example:

• a Chinese steel bedframe exported to the US as part of the UK-made bed → a potential 25% tariff on the value of the bedframe, if ROO deems the bedframe Chinese-made, plus 10% on the finished bed;
• if the bedframe is classified as UK-origin → zero tariff (within quota), plus 10% on the finished bed.

Tariffs aside, if that iceberg of a crisis is inevitably approaching, your crisis response checklist could include the following.

1. Identifying how the event impacts your business’s ability to fulfil contracts, namely:

• Which contracts and obligations are affected?
• How severe is the disruption, and how long might it last?
• How vital is the affected contract to your business?

2. Engaging with suppliers and customers to understand:

• production delays, stock availability, and alternative supply options (e.g., local recycling);
• whether customer’s demand for your products remains unchanged;
• must some customers be prioritised and are there some who will allow flexibility (e.g., smaller orders, extended delivery terms, alternative parts, waived penalties).

3. Examining key terms, including payment rights, penalties, liability limitations, force majeure and dispute resolution. You may find, much to your relief, that your contractual INCOTERMS-based delivery terms shift tariff risks onto US buyers and a price adjustment clause helps absorb rising costs efficiently.

ARE THERE WORKAROUNDS?

If delay or default (on your part) seems likely, notify the customer early and, where possible, renegotiate impractical terms, ensuring proper documentation of the revised agreement. If re-negotiation is unachievable, consider the following.

1. FORCE MAJEURE

A well-crafted force majeure clause can excuse contractual non-performance caused by events beyond the affected party’s control, making it a key tool in supply chain disruptions. Despite being well-used, the complexities of force majeure clause drafting and rules of interpretation are often overlooked. Below are some factors that can render it inoperative:

• it must be explicitly stated in the contract as courts will not imply it;
• courts narrowly construe force majeure clauses, and generic catch-all phrases (e.g., “events of similar nature”) are often ineffective;
• the event alone must have caused the non-performance;
• the clause may excuse non-performance only if the event has made it impossible or impracticable, not merely difficult or uneconomic;
• the affected party must take reasonable steps to minimise the event’s impact.

2. FRUSTRATION

Not talking about a punching bag – “frustration” is actually a legal thing.

If a contract lacks a force majeure clause, the doctrine of frustration may apply if unforeseen circumstances make performance radically different from what was originally agreed, excusing further obligations.

That said, explaining frustration to non-lawyers tends to induce yawns, so best left to a lawyer to geek out over.

3. DISPUTE RESOLUTION

Before invoking force majeure, frustration, or other legal protections, assess the wider impact on your business, as your customers might be unhappy with your decision, which could potentially lead to a dispute. Legal conflicts drain resources, disrupt operations, and harm reputation, so weigh the economic and relational risks carefully.

If a dispute arises:

• maintain clear documentation and record verbal discussions;
• avoid statements that could be interpreted as a waiver of contractual rights;
• take steps not to burn bridges with the company you are in dispute with by establishing two channels of communication – in case you want to do business with them again.

4. INSURANCE

Specialist insurance products can help mitigate financial losses caused by supply chain disruptions. Business interruption insurance covers lost income and extra expenses when operations are halted, while supply chain disruption insurance protects against financial setbacks due to third-party supplier failures and even the inability to perform a contract.

DODGING THE NEXT CURVEBALL BEFORE IT’S THROWN

Both a blessing and a curse of today’s trade world is its inter-connectedness. As such, geographic diversification across regions is perhaps the most effective way to minimise supply chain disruptions. Along with that, updating contracts by incorporating robust protections, including the right to switch suppliers, beneficial delivery terms, price adjustment clauses and force majeure is a key method to create a cloak of protection over you.

This article does not constitute legal advice. For a conversation about a comprehensive crisis response plan, call Natalia Samodina on 07747131233 or email at natalia.samodina@thelegaldirector.co.uk.

www.thelegaldirector.co.uk