Quick Tips
• Beware of vague wording in the contract, such as a situation where it is "inadvisable" to go forward with the meeting. Make the terms very clear.
• Have separate performance clauses: one that covers true acts of God over which neither party would have control, and another that addresses unforeseen happenings, such as a change in flag, that might be influenced by one of the parties.
• Remember that adjustments you make to cover partial performance failures also will affect F&B guarantees and other minimums.
One of the most misunderstood legal terms by laymen, and for that matter, lawyers, is force majeure. Many planners trust that a force majeure clause will relieve their organization of responsibility when something unforeseen disrupts their events, but it doesn't always work that way.
Definition
The legal concept of force majeure (French for "greater force") means impossible to perform. Thus, if a force majeure circumstance makes it impossible for the parties to fulfill their contracted duties, they are relieved of any liability for failing to perform because of the intervention of the superior force. But the inability to fulfill the contract terms is excused only for the duration of the force majeure circumstance.
Traditionally, force majeure clauses have related to so-called "acts of God," meaning weather interruptions like earthquakes, tornadoes and hurricanes. The courts over the years have expanded the definition to include other disasters, such as the hotel burning to the ground, government action that would prevent the fulfillment of the contractual terms, labor strikes, riots and travel interruptions.
Enforcement
What if the situation makes performance only partially impossible? That's when good contract draftsmanship comes into play. You want to list what will get you out of the entire contract or a portion of it. An example of this would be when 40 people are prevented from getting to a venue for a 200-person event due to weather-•related interruptions. If you think snow in January might keep your attendees from Minnesota at home, spell it out.
Today, we also separate clauses covering acts of God from those that cover other situations that would limit or make performance impossible. These include deterioration of the property, a change in flag, remodeling, union unrest and events over which one party has no control but the other might.
Word to the wise: When writing the contract, make allowances for the ripple effect on other event aspects, such as food-and-beverage guarantees, minimums for meeting room space, etc.
Can You Skip It?
Meeting professionals often are erroneously informed that no force majeure clause is necessary. On the contrary, spelling out the possibilities is always a good idea. In today's environment, many exigencies could be considered extraordinary events that should excuse performance but are not within the traditional definition of force majeure. But if these situations are not defined in the contract, you are not going to get that reduction. Do not be misled by thinking that force majeure automatically will apply.
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 meetings-conventions@mcmag.com.