Good to Know
Force majeure clauses cover disruptions that happen in the moment, as the meeting is about to begin, not happenings that take place a year out.
• As the date of your event nears, keep abreast of the news in the destination to be prepared for any last-minute adjustments you will have to make, whether that means canceling or just rerouting transportation around blocked streets.
• Review your cancellation or business interruption insurance to make sure it covers all the bases.
Force majeure continues to be one of the most misunderstood provisions of a meeting contract, though it is an everyday clause. Most often, it is thought of narrowly as an "act of God," covering circumstances where a meeting is canceled due to an unavoidable weather event such as a hurricane, earthquake or tornado.
But what if, say, your speaker, who is the main draw of the program, suddenly becomes unavailable due to a serious injury or illness, and based on that alone, a significant number of your attendees drop their plans to attend? Such a situation can be covered by force majeure, if it is contractually defined as including such a "failure to perform" on the part of the speaker, as well as you/your company for having promised his or her participation in the program.
In a more extreme case, suppose civil unrest, as occurred in Baltimore in April, took place during your meeting, preventing attendees from getting to sessions or causing them to leave the host city altogether? Would rioting in the streets be covered under the clause?
The key is in the language of the contract. With careful drafting, force majeure can cover an "act of human" as well.
Many times we find in contracts, and most particularly in force majeure clauses, language that clouds the issue of failure to perform. Force majeure is an artful term in the legal community and basically means that performance has been made impossible, beyond the control of either party. My suggestion for greater understanding and clarity is to have a section in your contract that spells out what is excusable without liability to either party for events that may or may not occur. That means spelling out possible situations such as civil unrest, suddenly unavailable speakers, etc. (You'll add to this list over time as you experience different situations.)
Over the years, we also have dealt with the term "commercial impracticability" in cases of nonperformance. What does that really mean for meeting contracts? Generally, the doctrine of impracticability excuses performance of a duty where that duty has become unfeasibly difficult or expensive.
In the speaker example, where attendees canceled as a result, would your group have to take on the whole financial burden for the failure to fill the room block? Would it be fair for the speaker to share in the cost due? The courts would consider many factors, but to avoid litigation, in such a case, good contract drafting would state specifically that if Speaker X is not available or Group B has not been able to fill the block, performance is excused.
The key is always to spell out explicitly what will allow for cancellation or revision without liability. That's an act of good planning.
Jonathan T. Howe, Esq., is a senior partner of the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. Email questions to him at firstname.lastname@example.org.