The Other F-Word You Don't Want to Hear
Gail Davis, 14 April 2021
GDA Speakers had 190 events impacted by the pandemic. Imagine someone walking into your office and asking to see all the current contracts. You hand them over and they rip them to shreds and say "good luck" as they walk out. That is how it felt starting in March of 2020. It was as if everything was up in the air. And as I started to figure it all out, another dreaded F-word glared at me.
Let’s face it, sometimes you just gotta say it...Force Majeure. Except there isn’t that sense of satisfaction after expressing it. More like an overwhelming sense of frustration. With the global pandemic everyone got real familiar with force majeure. Many of you are familiar with this contract clause which in its simplest definition, is when unforeseeable circumstances prevent someone from fulfilling a contract. Without getting to into the “legalese” or at the risk of boring you with excessive details, the events that may trigger force majeure include - but are not limited to; Acts of God, government restrictions, earthquakes, hurricanes, wars, terrorist attacks, lockouts, failure or delay of transportation not within either Party's reasonable control, absence of power or other essential services - or any other cause beyond the reasonable control of a Party. As a result, such Party shall not be responsible to the other Parties for failure or delay in performance.
The next part is the most important - the terms of this clause shall not EXEMPT but merely SUSPEND each Party from its duty to perform the obligation.
Before 2020, the only times I can remember invoking force majeure were the times around 9/11 and a few hurricanes. Last year, as a result of COVID, everyone got real clear on the term and how it impacts contracts. In order to enact force majeure, the occurrence must make your meeting inadvisable, illegal, or impossible. For example, if you can’t fulfill an agreement because there is a government restriction in place that prohibits your scheduled meeting on the contracted date, force majeure “suspends” the event until it can be rescheduled or go virtual.
Once everyone understood force majeure, the discussions began. Many clients were requesting complete protection and a guarantee that all monies would be returned in the instance of force majeure. Speakers were also seeking protection. At GDA, I strongly believe our role is to be the arbitrator of fairness. We must step back and protect all parties involved. I am seeing more and more contracts written that state if a live event is not possible, then every effort will be made to convert to virtual. Virtual meetings and events have come a long way creatively and have proven to be a great success and option for those who can’t do live events at this time. Additionally, force majeure for a virtual event is far less likely.
A force majeure clause will always be a critical contract component should a meeting or event need to be cancelled and postponed in response to a disaster. Flexibility remains key as conducting larger live events may still be challenging for many organizations in 2021. All parties taking the appropriate precautionary measures, can ensure the best possible outcome occurs for your event moving forward.
And I really do hope it’s a long time before I use this F-word again.