Meeting professionals today are risk managers. When planning an in-person event in a partially vaccinated world, the biggest concern is that someone gets sick and files a negligence lawsuit stating that the planner did not provide “reasonable care” and did not cause “injury or illness and damage.” Most venue contracts provide for the payment of lump sum damages in the event of cancellation, and these payments often increase as the dates of the event approach. Organizations must ensure that they follow these expected dates and fees so that decisions can be made about them. In order to protect themselves from these often high penalties, non-profit organisations should consider, when considering cancellation, whether the event can be cancelled in accordance with the contractual provision on force majeure. As outlined in Pillsbury`s advice on the insurance implications of coronavirus-related cancellations, businesses should also review their insurance coverage for cancellation-related losses to assess when, if and how event contracts should be cancelled. Ask yourself what these clauses are and what they refer to specifically?! Download this free checklist HERE that reviews each clause step by step and how it protects your business and customers in these unpredictable situations. Remember, the Legal Paige always suggests that you have two-way contracts that also grant your clients rights and obligations under the contract (and they are much more likely to accept a contract that allows them to be exempted from performance in case of force majeure). We need to think about the purpose of the meeting and let that be an essential part of the agreement when we have a commercially impractical or frustrating opportunity to cancel without liability. Or at least to have an argument that we can go out without responsibility. (Read more about frustration clauses here.) How do you see the future evolution of contracts? I often get the question, why have contracts become so long? And the reason for this is that they are based on bad experiences. Right now, we all have a bad experience with covid-19 and we will try to fix it, which will be in a way that will be most favorable to us. However, it is up to the organizers of the event to create a “reasonably safe” venue, which means following the instructions of the CDC, the World Health Organization, and other groups to maintain high standards of cleanliness and hygiene so as not to potentially violate due diligence. The effect of a force majeure clause that simply excuses any future performance by one of the parties may be a trap if the force majeure event occurs when a party has essentially provided a service.
For example, in a case involving a contract for a live event at a resort, NetOne, Inc.c. Panache Destination Management, Inc., No. 20-cv-00150-DKW-WRP (D. Hawaii June 5, 2020), the pandemic was considered a force majeure event that exempts both parties from future performance of the contract. But the party that had booked the event had already paid a substantial down payment – that is, it had almost finished its performance – while the station had done some work in preparation for the event but had not hosted an event. The reserved party filed a lawsuit to recover his deposit. His claim was rejected because the contract was clear: force majeure released both parties from future performance, and “[t]he force majeure provisions are not stipulated in the force majeure provisions that if the contracts are terminated due to an eligible event, the non-terminating party must repay all down payments paid.” (In a subsequent decision, the court upheld its decision and suggested that the reserved party make an unjust request for enrichment.) Let me come back to the hotel`s point of view. Will they really be able to serve you in the same way? One thing I warn everyone about, you have deposited deposits and often you leave that deposit at the property.
Well, what certainty do you have that when it is time to play, the hotel will be solvent or even open and your deposit has not been paid into the bankruptcy estate, so you will not have the right to recover this money? I suggest that one of the things you want to look at, if you have deposits or deposit requests, get them back or if you have put at stake a security precaution,. B for example putting this money in an escrow account, which means that the event can only be funded when a performance occurs. If the service does not take place due to a delay or bankruptcy of the place or the provider, this money will be refunded to you. You must also determine whether the contract requires the non-performing party (for example. B a company cancelling an event) reimburses the other parties (registered for the event) for the costs related to the non-performance. If in doubt, talk to a lawyer who specializes in business contracts. Companies should also consider a variety of practical considerations, including whether the event can be held virtually or without attendees, and whether the organiser has insurance covering possible liability in the event of postponement, rebooking or cancellation. There are several types of insurance policies that can provide coverage, including event cancellation, business interruption, conditional business interruption, and general commercial liability. If a nonprofit is considering cancelling an event due to COVID-19, it should carefully consider the relevant provisions, in particular force majeure, in all venue, supplier and other contracts for obligations related to the event, as well as the current circumstances. Legally, most business owners are wondering how their contracts can come into play with cancellations and/or debt restructuring situations related to the coronavirus. .