Force majeure clauses are important for event planners because these clauses provide a legal mechanism for handling unforeseen and uncontrollable events that could disrupt or prevent the execution of an event. These clauses are especially relevant in the world of event planning, where various factors, such as weather, natural disasters, pandemics, labor strikes, and government regulations, can impact the ability to host an event as planned.
Key Reasons Why Force Majeure Clauses Are Important for Event Planners
Force majeure clauses help event planners manage the risks associated with unforeseen events, providing a framework for determining how to proceed or cancel an event in the face of unexpected circumstances. Without a force majeure clause, event planners may be financially liable for non-performance simply due to circumstances beyond their control. This clause can protect them from penalties, fines, or breach-of-contract claims.
Elements to Include in Force Majeure Clauses
When drafting a force majeure clause in an event planning contract, certain key details and elements should be included:
Definition of Force Majeure Events
Clearly define what events or circumstances constitute force majeure. These may include natural disasters (e.g., earthquakes, floods, hurricanes), acts of terrorism, war, government regulations, pandemics, and other events beyond the control of the parties.
Allocation of Costs
Specify how expenses related to the force majeure event will be allocated between the parties. These can include refunds, rescheduling fees, or the allocation of additional costs incurred due to the event.
Mitigation and Dispute Resolution
Describe the efforts that both parties are expected to make to minimize the impact of the force majeure event and resume normal operations as soon as possible. Include a process for resolving disputes related to the force majeure event, such as arbitration or mediation.
Specify the obligations of both parties in the event of a force majeure event. This should include requirements for providing notice to the other party as soon as practicable.
In an article from Meetings.net by Rob Carey, Rob spoke with Joshua Grimes, Esq., president of Philadelphia-based Grimes Law Offices, LLC, who expressed concern over the force majeure clauses in event contracts, particularly the standard 10-day notice most hotels and event venues require. “Where did 10 days come from? It’s something that hotel lawyers came up with. But there's no magic to 10 days; it’s simply an attempt to cut things off so that you need to tell the hotel quickly.” Grimes advises that event planners should not accept the standard force majeure language in contracts but instead negotiate a better timeline for decision-making based on the reality of how natural disasters play out, using the recent fires in Hawaii as an example. He suggests that “’the clause could say that either party is able to declare force majeure when either arrives at a decision that it would be illegal, impossible, or commercially inadvisable or impractical for that party to perform’ under the contract.”
It is advisable to have an attorney help you draft your agreement; given the volatility of recent natural disasters, however, it is important to consider Joshua Grimes’ insight on changing the language and notice requirements.