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by Louise M. Felsher, CMP, CMM | December 01, 2003

Not so long ago, the language in a standard meeting contract’s force majeure clause seemed so implausible, it was skimmed over by planners with perhaps the same attention theme-park visitors give to roller-coaster warnings.
   Today, however, many of the nightmares such clauses address wars, deadly viruses, bankruptcies, weather-related disasters have become far more imaginable as likely risks. Add continued economic instability to the mix, and planners are presented with contracts containing more fear factors than ever before.
   While worry-free risk management is impossible, upgrading previous safeguards to protect against risk will help planners combat sleepless nights.

COUNT THE DOLLARS
Figure out the financial risk the event absolutely cannot exceed. For example, a corporate planner in Chicago adds up the value of her vendor contracts and determines her product launch at a San Francisco conference center must not exceed $500,000 in attrition/cancellation and food and beverage risk. If the firm stands to lose $750,000 in the event the meeting does not go forward, and there is no room for negotiation, the planner might need to move the program to a second-tier city where costs are lower.
   Calculate the total risk, including out-of-pocket expenses for airline deposits and direct-mail expenditures that cannot be recouped in the event of a cancellation. If vendors cannot agree on this number, do not gamble on a contract with them.
   Know the limits of your organization’s insurance, including worker’s compensation and union regulations. Corporate and nonprofit limits will vary.
   Most hotels carry adequate insurance (but never assume this; always ask what the policy covers, and ask to see a copy). On the other hand, many conference centers and off-site venues do not have their own insurance.

SHARE THE RISK
Planners can and should attempt to transfer as much risk to vendors as possible, but inevitably risk is shared in some part between buyer and supplier.
   If the company does not have its own legal counsel, consider hiring an attorney who specializes in event contracts or a third-party risk assessor/contract expert. This will be well worth the money invested. 
   Standard clauses for the employer should be written, updated and consistently used. Never be shy about insisting on your own contract or addenda; it is best to use your own language or contract template.

RESPECT THE FORCE
The force majeure clause, once a pessimistic dose of legalese, is now an absolute necessity. Do not assume the standard clause is going to cover the meeting against all acts of God. If attendees simply are afraid to travel or a corporation sets its own travel restrictions, the typical force majeure clause will not ensure penalty-free cancellations or attrition risk. Be sure everything is spelled out.

ANTICIPATE TROUBLE
Risk levels affecting meetings can change from moment to moment, so be sure to keep informed about what’s going on in the world, even if the event is local.
   A thorough checklist should include factors such as weather, strikes, major economic changes, bankruptcies, mergers, property management changes, etc.
   Try to anticipate changes in your employer’s policies, which could include possible travel or hiring freezes, or other factors that might require shifts in program content. Run through this checklist weekly in the months leading up to the meeting, and tweak plans as needed.