How to navigate your venue contracts during the COVID-19 pandemic
/Legal savvy to help navigate through COVID-19 pandemic uncertainty
My program canceled…now what?!
With worldwide event cancellations in an effort to contain the COVID-19 pandemic, planners not only have to worry about how to re-think their events to ensure attendee health and safety, but they’re also left questioning what legal recourse they have when it comes to their hotel and venue contracts in the face of event cancellations. I’ve always had a passion for navigating venue contract negotiation for just this reason, and even included some of my contract negotiation pro tips in my book, The Art of Event Planning. For this blog specifically, I’ve outlined a few key clauses to help you navigate the unpredictable event environment so that you can minimize the impact that the COVID-19 pandemic has on your bottom line and responsibly move forward with any contracts that are pending. Please note that these recommendations are based on my own personal experience and do not reflect the recommendations of my company, SoftBank Vision Fund, and should also be reviewed with your own legal counsel.
Force Majeure
If government bans travel or declares a state of emergency, then Force Majeure clause can be invoked, meaning neither a venue or contracting party can be held liable for nonperformance. Examples of this as it pertains to coronavirus include the US travel department banning travel into/out of China, which would make it impossible to host an event there for international attendees. Other instances of this are declarations of national emergencies, as in the city of Austin and its cancellation of SXSW. Always include a force majeure clause in your contracts so that instances like this will release you from losing additional money on an event that cannot happen. A sample clause I always use is pasted below:
The performance of this agreement is subject to any circumstances making it illegal, impossible or inadvisable to provide, use, or travel to or from the Hotel facilities, including, but not limited to, Acts of God, war, government regulations or intervention, disaster, strikes (except strikes by hotel employees), civil disorder, epidemic, or curtailment of transportation facilities. This agreement may be terminated without any liability of any nature for any one of the above reasons, or based on any act of, or risk of, terrorism or other unsafe conditions, which cause travel to be impossible or inadvisable. Termination must be by written notice from Hotel or client. Following termination based on any of these circumstances, the Hotel will refund to client any deposits or other monies previously paid with regard to the terminated agreement.
Rebooking Clause
Hopefully, you’ve never dealt with a major event of yours canceling, but at some point in your career (and maybe soon), you will likely face this situation. I absolutely always make sure I ask for a rebooking clause in my hotel or venue agreement in case I do need to move the date of a program. Typically, a rebooking clause will allow you to rebook your event within 1 year of the program date making use of the deposits or a percentage of the deposits you’ve already paid and/or owe the venue. A sample rebooking clause you is as simple as the below:
If the program cancels, 100% of the cancellation deposit and penalties will apply to a future program that operates within one year from date of cancellation.
Moving forward with booking contracts during an epidemic
To protect your event against any concerns that might make attendees reluctant to travel, such as a pandemic, it’s helpful to include a clause that allows you to reduce your guest count if you have attrition due to a perceived threat. An example of a clause like this that I use is:
Should the organization wish to continue with the event, but because of travel advisories as to health, security or terrorism, which might cause a reduction in attendance, the organization shall be able to reduce its guest count accordingly, without liability and without a reduction in amenities that are contingent on room block and pickup.
In closing, every planner right know is dealing with uncertainty and my heart goes out to every planner and attendee who has been impacted by the coronavirus. Though our health is the most important and must be protected first and foremost, we can still be smart about how we proceed and modify our event strategies given the current situation. If you have any additional suggestions for helping planners mitigate cancellations and protect themselves as they look to move or rebook their events, I welcome your feedback here!
