Law prefers consistency, choosing to not enforce contract requirements for one does set precedent for another to sue to get out of that contract requirement, so it is much better to enforce the contract. If the current contract is unenforceable it is time to sit down to negotiate a contract change that is fair to both parties. Often in bankruptcies that same negotiation occurs, except in the US Chapter 7 case where the entity basically vanishes into vapor. The lender gets the plane back but no money, but if the OEM hasn't delivered it just gets the prior payments.
Often a solution if the airline is a going concern and has decent prospects, but no cash is for the OEM to arrange a financial lease, like what Boeing Capitol does, so the airline can accept delivery. But if the airline already has a desert full of planes not in service there are few good choices.
The OEM's have seemed to move the payment at signing to a payment applied when parts begin to be purchased. The first turbine casting needs to be paid for by then, but this date is probably 30 to 36 months before delivery. There are progress payments due at contract milestones, if a milestone is not paid for, the most agreeable answer is for the OEM to idle the order, letting others that have paid pass by, until paid and it enters the production plan. It is the value already put into the frame that is the real club by the OEM on the airline. Loosing the $20M already paid gets one's attention. Not getting sufficient early payments allows the airline to more easily walk away.
Look at the Air Bridge Cargo, V D recent situation. V D disappeared at the delivery date with no contact, then finally after meeting more than a month after finally said they cannot pay for the plane and cancelled the contract. (A similar less dire was happening with 3 77F's at the same time.) VD basically wrote off all the deposits and Boeing resold the plane for what it could get. Most NTU's are in a similar situation. Well VD is now having regrets and went to court to get Boeing to honor the contract VD broke. The judge denied any relief for VD.
What leverage the airlines have is lost if they cease being a blue chip customer.
I do wonder what deposits will be lost? There is a need to sit down. Airlines must not go bankrupt, if possible. Airbus (and Boeing) must preserve the supply chain.
I personally believe neither Airbus nor Boeing cut production enough. There will be far too many aircraft on the market. I expect many a vendor to have to declare CH11. Some will have to break contracts.
A & B face a triple wammy.
One. Orders cancelled and / or deferred, milestone payments missed / deferred including delivery settlement.
Two. Demands from customers with firm orders to re-price.
Three. Customers with accrued retrospective credits opting to take as cash, even though that results in a discount / lower value.
Airbus legal action will be in response to the above, including court confirming OEM ability (included in T&C's) to freeze retrospective credits so customers cannot convert to cash and withdraw whether on cancelled / deferred deliveries or already delivered aircraft, allow application to due / overdue milestone payments, and reverse retrospectively, credits earned on already delivered aircraft, and the ability to withhold parts and services for the existing fleet.
A & B standard T&C's allow the above, but legally untested.
And it's not just the OEM's and customers between a rock and a hard place. Pre-shipment financiers will argue if an OEM agrees to defer delivery with a customer, they still want their finance repaid as if delivered on the originally agreed dates. But post-delivery finance is almost impossible to arrange. So the pre-shipment financier will want the OEM and / or customer, and / or post-shipment financier to take them out.
In normal times, that's exactly what would happen, with usually the OEM (air frame and engines) and post-shipment financiers coming to the party. But these are not normal times, and industry liquidity has already been stretched by MAX and some pre-COVID deferred deliveries.
So legal action is more than a threat. And for now Boeing will be happy for Airbus to take the lead. Airlines consider it's OK to withhold refunds from customers, but watch them go ballistic when they can't cash in their OEM credits.
Action by engine OEM's will be interesting, especially where the customer has negotiated direct with the OEM. For example, customers deemed delinquent, can have engine services withdrawn globally from approved service agents.
Some otherwise very reputable airlines might be about to find out what it's like to run an airline in Iran, however a lot of discussions to be had before that happens. But first rule of discussions, is talk to your suppliers / creditors.