For future contracts, spell out the situations under which your organization will be able to cancel or modify the agreement without liability. However, be aware that venues might not agree to such terms.
• Include a provision that if attendance falls because of politics, performance will be excused. (Again, the venue might not agree.)
• Best bet: Follow through on existing contracts and avoid the destination for future events.
Today's political climate has caused many organizations to consider what they can do to advance a particular position, philosophy or even political-correctness issue. This is not new. Over the years, many organizations have used the power of boycotting to let destinations know they disagree with legislation or positions taken by that community.
For example, Missouri was subject to a boycott for not supporting the equal rights amendment when it was passed by Congress in 1972 but failed to be ratified by all states before a 1979 deadline. Arizona faced protests when its state legislature fought over whether to recognize Martin Luther King's birthday as a holiday, and when its immigration policies were seen as controversial.
More recently, the passage in March of HB2 in North Carolina, limiting the civil rights of the state's LGBTQ community, has garnered criticisms and more. Numerous organizations either have canceled their programs or have stated they will not meet in North Carolina until the law is changed. Leading the charge are sports organizations such as the National Basketball Association, the National Collegiate Athletic Association and the Atlantic Coast Conference, which have canceled events and announced they will not consider the state for any future programs until the law is repealed. (See M&C's related news item, click here for more on this issue.)
THE HIGH PRICE OF CANCELLATION
Canceling an event over ideology is serious business and means your contract most likely will be considered breached, because most agreements do not have a provision for such an action. I have seen a few contracts that allow organizations to get out of their obligations for reasons such as outbreaks of ebola or alleged social injustice, but they are rare.
A state's passage of controversial laws is not a legitimate cause to cancel and does not fall under force majeure, defined as a happening that no man, woman or child has control over and that renders the parties' performance "impossible." Performance is not deemed to be considered impossible due to social issues, even if the destination has become less desirable and some invitees now will not attend.
I am loathe to provide a basic representative clause that might cover instances such as this, because one form cannot fit all circumstances. From a venue's point of view, its representatives should be most reluctant to sign any provision that allows cancellation because of some subsequent political action that might make the venue undesirable for the organization. The venue has no control whatsoever over what politicians do, beyond trying to influence the outcome, and that outcome still will be decided by the politicians, not the hospitality community.
Jonathan T. Howe, Esq., is a senior partner of the Chicago and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. Email questions to him at [email protected]