Meetings & Conventions: Planner's Portfolio November
The Law & the Planner
By Jonathan T. Howe,
CONTRACTING AGAINST ACTS OF TERRORISM
Does your meeting agreement clearly address the unthinkable?
In light of Sept. 11, it should
Sept. 11, 2001, brought shock, dismay, outrage and fear. The
devastation has had and will continue to have dramatic impact on
the meetings industry.
While many voices declare life will not be "business as usual,"
we should conduct the usual business. We need to consider necessary
changes in the day-to-day approach taken in negotiations, both from
the supplier's as well as the planner's point of view.
January 2000's The Law & the Planner addressed "force majeure,"
or what some call "Acts of God" clauses, which cover incidences
that warrant the cancellation of a meeting without penalty. That
article cited natural disasters such as hurricanes, but a carefully
worded clause also can cover terrorist attacks.
Consider using the following wording.
Either party may cancel this Agreement without liability as
a result of acts of God over which neither party has control --
government regulation, terrorism, disaster, strikes of others than
those employed by the parties, civil disorder, unavailability of
transportation facilities consistent with those in existence at the
time of contract, or other factors over which neither party has any
control -- making it impossible or illegal to perform materially
respective obligations within this Agreement. Either party may
cancel this Agreement with notice to the other.
Part of this clause that has raised many questions recently
concerns how long the effects of an act of God can be used as an
excuse to cancel the contract. After Sept. 11, many hotels waived
cancellation fees for several weeks and in some cases through the
end of October, but not all properties took such concrete steps.
You can avoid uncertainty by defining a set period of time or a set
of conditions for which cancellation or modification will be
accepted. For example, add a paragraph to the contract saying if
your event is scheduled within, say, 45 days of a force majeure
incident, you reserve the right to reduce your block or otherwise
cancel the contract. Also, you can outline ways activities might be
changed in view of unforeseen circumstances.
The inability of attendees to arrive at the site because of
delays or flight cancellations also is considered an act of God,
and any deposits made are to be refunded to the party who made the
Often when reviewing contracts, I find clauses that contradict each
other. Planners must reassess attrition and cancellation clauses
and make sure they are subject to the force majeure clause. For
meetings that depend on multiple facilities and suppliers, make
sure the force majeure, cancellation and attrition clauses are
consistent through all agreements -- from convention centers to
transportation to entertainers, among others.
Many organizations have purchased cancellation insurance. Such
policies usually cover more than the decision not to hold the
meeting; they're really "business interruption" insurance. The
coverage, however, while broad, might not cover acts of war or
terrorism. The insurance industry is reevaluating what
circumstances should be considered an insurable risk.
Such policies would not cover a voluntary cancellation of a
meeting unless there were adequate issues over which the insured
had no control that led to the decision not to hold the event.
SECURITYJonathan T. Howe,
Esq., is a senior partner in the Chicago and Washington, D.C., law
firm of Howe & Hutton, Ltd., which specializes in meetings,
travel and hospitality law. Legal questions can be e-mailed to him
Many planners are now reevaluating the security at their meetings.
For my thoughts on this subject, see "Lining Up the Security
Force," The Law & the Planner, August 2001.
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