The Executive - May/June 2017 - 20

Force Maj

O

ftentimes meeting and event contracts are negotiated several
years prior to an actual event. Without the help of a crystal
ball, lawyers must assist clients in managing risks that are both
foreseeable and unforeseeable. While things like low attendance
or insufficient function space are certainly foreseeable
hospitality industry risks, things like blizzards and terror
threats are unforeseeable. The force majeure provision is a risk
management tool that has become significantly more prominent
in the aftermath of September 11, Hurricane Katrina and Hurricane Sandy. These
days clients are asking if they can cancel without liability because of the Zika virus
or transgender bathroom legislation. During the recession, it was the economy. In
the future, it will be something else, but a good hospitality industry lawyer can help
clients anticipate even unforeseeable events and, in turn, reduce some risk.
What is Force Majeure?
Force majeure is a fancy French way
to say that a contract may be cancelled,
delayed or partially performed if
certain circumstances outside the
control of any party exist. If these
circumstances are present, either party
may terminate the agreement without
liability.
Force majeure provisions used
to be thought of under the category
of "boilerplate." They were often
overlooked as being standard form
language and were not properly
negotiated. But a force majeure
provision can be a great "get out of jail
free" card if negotiated sensibly and
drafted properly.
Typical Language
in a Force Majeure
Acts of god. Terrorism. Civil
disorder. What is an act of god? Better
yet, what do courts think are acts
of god? Force majeure clauses will
frequently laundry list calamities.
However, in addition to including the
usual cast of disasters, you need to
tailor your force majeure events to
your group. Specifics are important.
Take into consideration things like
the location of the meeting, the
geographical relationship of the
attendees and exhibitors, and types of
transportation to and from the event.
20

For example, if you are planning a
meeting in a flood plain area, make sure
to list flooding as one of the specific
events. If you are planning a meeting in
Washington, D.C., consider inserting
specific language that covers terrorism
or threats of terrorism. If you have a
summer meeting in Nevada or Arizona,
think about including loss of electrical
power.
Including but not limited to. Any
other emergency beyond the parties'
control. You cannot enumerate
everything that could possibly happen.
This language helps to cover events
you don't expressly list. However, don't
exclusively rely on a "catch all" phrase
because courts tend to interpret force
majeure language narrowly.
Impossible. Illegal. Inadvisable.
Materially affected. Commercially
unreasonable. Commercially
impracticable. These words are the
thresholds for release of liability, and
each word provides for a different
standard. "Impossible" means that
the hotel is no longer operating or
more likely destroyed. "Illegal" means
that a law has been enacted that will
keep attendees from getting to the
hotel or allowing the hotel to operate.
The likelihood of these standards
occurring is slim. "Inadvisable" is the
most lenient threshold, albeit the most
subjective. After all, who determines

Ca lSAE's T HE E XEC U T IV E - M A Y/ J U NE 2 0 1 7

By Naomi Angel and
Christina Pannos
what's inadvisable? "Materially
affected" and "commercially
unreasonable" are standards that
can be measurably defined, i.e., if x
percentage of attendees cannot arrive
within 24 hours of start of meeting
as a result of the force majeure event.
Finally, courts sometimes look to the
term "commercially impracticable"
as a way to consider the viability of
invoking a force majeure event. Groups
should negotiate to include in their
force majeure provisions one of these
"modifiers" in addition to the typical
"impossible" and "illegal."
Without liability. Some event
contracts require deposits or even
payment in full well ahead of the event.
Be sure that the language in your force
majeure provision affords you the
opportunity to recoup some or all of
those payments.



Table of Contents for the Digital Edition of The Executive - May/June 2017

The Tipping Point of Association Learning
6 Ways to Use Video at Your Annual Event
Embrace Unconventional Learning Formats to Educate and Engage Attendees
Force Majeure: When Can I Cancel My Contract With No Liability?
2017 Elevate Annual Conference
Chair’s Message: It’s Been an Education by Mike Mitchell, CAE
At a Glance
New Members
Destination: Los Angeles, Anaheim, Temecula, San Diego
Member Spotlight: Scott P. Leary
Index to Advertisers
The Executive - May/June 2017 - intro
The Executive - May/June 2017 - cover1
The Executive - May/June 2017 - cover2
The Executive - May/June 2017 - 3
The Executive - May/June 2017 - 4
The Executive - May/June 2017 - Chair’s Message: It’s Been an Education by Mike Mitchell, CAE
The Executive - May/June 2017 - At a Glance
The Executive - May/June 2017 - 7
The Executive - May/June 2017 - The Tipping Point of Association Learning
The Executive - May/June 2017 - 9
The Executive - May/June 2017 - 10
The Executive - May/June 2017 - 11
The Executive - May/June 2017 - 6 Ways to Use Video at Your Annual Event
The Executive - May/June 2017 - 13
The Executive - May/June 2017 - 14
The Executive - May/June 2017 - Embrace Unconventional Learning Formats to Educate and Engage Attendees
The Executive - May/June 2017 - 16
The Executive - May/June 2017 - 17
The Executive - May/June 2017 - 18
The Executive - May/June 2017 - New Members
The Executive - May/June 2017 - Force Majeure: When Can I Cancel My Contract With No Liability?
The Executive - May/June 2017 - 21
The Executive - May/June 2017 - 2017 Elevate Annual Conference
The Executive - May/June 2017 - 23
The Executive - May/June 2017 - 24
The Executive - May/June 2017 - 25
The Executive - May/June 2017 - 26
The Executive - May/June 2017 - 27
The Executive - May/June 2017 - 28
The Executive - May/June 2017 - Destination: Los Angeles, Anaheim, Temecula, San Diego
The Executive - May/June 2017 - Index to Advertisers
The Executive - May/June 2017 - cover3
The Executive - May/June 2017 - cover4
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