Do meetings cancelled as a result of coronavirus concerns qualify as force majeure? Lisa Sommer Devlin, J.D., attorney at Devlin Law Firm, explained in a recent Smart Meetings Accelerator webinar “COVID-19 Considerations for Meetings Contracts” that the answer is complicated.
The Reason Matters?
The legal question that determines whether you can claim force majeure—and therefore cancel without liability—rests on the difference between whether you physically can’t host a meeting (the building burned down) or don’t want to (because too many sponsors or attendees are dropping out). Sommer Devlin explained that if the truth is the latter, you will probably owe cancellation fees. In the case of the former, it is the responsibility of the planner to prove the impossibility.
“The facts are that the Centers for Disease Control says that the risks of [contracting] COVID-19 are very low in the United States,” Devlin said. “Maybe we should be, but nobody ever cancels meetings over the annual flu outbreak. The COVID-19 is just a new or different type of flu.”
If the U.S. government prohibited meetings altogether, that might be different, she said. “Unfortunately, there’s not a lot of legal guidance that you can rely on,” Devlin said.
What Should You Do Now?
“The first step is to read your contract,” Devlin said. Many contracts are negotiated with special or different or hybrid clauses. You’re going to have to see the specifics of what you’ve agreed upon.”
If, after you fully examine all the facts and really think that, you must cancel your event, bring a business solution. “You’re going to get a much better response from your hotel partners if you try work with them rather than just calling it quits,” she said.
And a postponement is not always the solution that will erase the cancellation fee. “If you have an event scheduled in April and you don’t have it, then you’re canceling it. If you come back in another time, that’s great and the hotel appreciates it, but the hotel is not making it up its loss for that April event.”
Understanding the mindset of the hotel—and the legal requirements of the contract—could help you make your case about how to work together to find the best solution for all stakeholders—and keeps everyone safe.