If you or an organization you’re involved in has an event scheduled over the next few weeks, it’s a good idea to reschedule or cancel the event. You may be wondering – does the force majeure clause in your contract cover coronavirus? State and local governments are now recommending that all events of 100+ people be canceled/postponed, and even smaller gatherings are not recommended. If you are planning a conference or another event for which a contract was signed, it’s a good time to review the force majeure clause.
A force majeure clause excuses performance of a contract when one or both parties cannot perform due to something outside of their control – typically something like a major weather event, a war, a strike, a natural disaster, or other significant or catastrophic event. Some force majeure clauses may be broad and/or specific enough to cover a global pandemic like COVID-19, but some may not. As sporting events and other large functions are canceled, you may be wondering what you can or should do?
If your contract includes a force majeure clause that does cover pandemic (or mandatory cancelations or lockdowns due to illness), then hopefully all parties are able to work together to cancel or reschedule the event for a later date, without any financial penalty. No existing force majeure clause will specifically cover coronavirus or COVID-19, since this is a new issue.
If the contract does not include a force majeure clause, or the clause does not cover this type of event, it’s still a good idea to cancel or reschedule the event for a later date. There may be a financial penalty, but ideally the parties should work together to reach an agreement that’s mutually beneficial, such as rescheduling for a minimal additional fee or canceling for a reduced cancelation penalty.
Moving forward, we recommend that all contracts for events (as well as contracts that require time-sensitive performance) include a force majeure clause that covers pandemics and related lockdowns or cancelations. Please contact the attorneys of Demorest Law Firm for assistance with current issues or to review or draft future contracts.
