May 01, 2003
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   IS THE FAST-SPREADING ILLNESS COVERED UNDER FORCE MAJEURE?

SARS Puts Contracts Under a Microscope

Masked ball: Banquet waiters at the Hong Kong Cultural Center
Masked ball: Banquet waiters at the Hong Kong Cultural Center Group and convention bookings, already softened by the war in Iraq, sustained a new blow last month as cases of Severe Acute Respiratory Syndrome, or SARS, spread throughout Asia and North America. An ensuing rash of event cancellations raised new legal questions about cancellation fees.

In Canada, SARS-related fears sparked the Philadelphia-based American Association for Cancer Research to call off its annual meeting, which was scheduled for April 5-9 in Toronto. At press time, the group was working with hotel and airline officials to limit the financial impact tied to cancellation.

“This is an area of law for which there is very little clear precedent,” said Henry Schaffer, an attorney with Howe & Hutton Ltd. in Chicago, who noted that force majeure clauses often are limited only to situations that would make it either “illegal” or “impossible” to hold the event.

Meanwhile, parts of Asia, where reports of the illness first appeared, are reeling from severe drop-offs in bookings. Among those canceling in Hong Kong was the International Conference on Acoustics, Speech and Signal Processing, confirmed Rich Cox, president of the Piscataway, N.J.-based Institute of Electrical and Electronics Engineers Signal Processing Society.

While Cox wouldn’t comment about possible penalties, pending resolution of contract issues, Schaffer said under the narrow wording of most force majeure clauses, groups would face the difficult task of convincing a court that a condition such as decreased air travel made it impossible to hold the meeting.

“Our firm has been using a provision that says ‘illegal,’ ‘impossible’ or ‘inadvisable,’” said Schaffer. The last term is less narrow, giving meeting planners more breathing room, he pointed out.

Attrition clauses also might come under scrutiny, according to legal experts, as skittish attendees forgo conferences due to health concerns. The scenario might force planners to choose between canceling an event or going forward and shouldering costly attrition penalties.

To protect against such a scenario for future bookings, Schaffer suggested adopting an attrition clause that waives or lowers penalties if an event is held despite extreme circumstances.


What Association Executives Earn The gender gap in earnings grows in relation to size of organization, according to a 2001 compensation survey. Male CEOs Female CEOs Trade association $136,775 $92,125 Individual membership association $139,241 $85,204 Total staff size: 2 or fewer $75,000 $60,000 3 to 5 $95,640 $77,000 6 to 10 $116,550 $108,000 11 to 20 $138,200 $126,000 21 to 50 $201,923 $159,280 51 to 100 $237,900 $145,518 More than 100 $287,600 $249,233 Total annual budget: $300,000 or less $67,600 $54,789 $300,001 to $500,000 $75,600 $68,579 $500,001 to $750,000 $90,000 $72,800 $750,001 to $1 million $102,000 $87,525 $1,000,001 to $2.5 million $118,800 $112,425 $2,500,001 to $5 million $170,000 $137,100 $5,000,001 to $10 million $227,750 $160,585 $10,000,001 to $15 million $225,994 $171,750 More than $15 million $285,000 $256,269 Source: American Society of Association Executives

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