Webinar Recap: 5 takeaways from the Event Contracts in the Age of COVID-19
Navigating event contracts and contract clauses, like forece majeure, with hotels due to COVID-19.
This past week, we had the opportunity to partner with two of the industry’s top attorney’s Barbara Dunn, who represents Groups and Associations for Barnes & Thornburg LLP, and Lisa Sommer Devlin, who represents hotel clients for Devlin Law Firm, P.C. to share some knowledge and tips to 1,100+ planners and hoteliers about navigating event contracts in the age of COVID-19.
In case you missed it, we’ve recapped five main takeaways.
Check out the live recording of the webinar and download the material presented here
1) Basics of Force Majeure.
So, what is Force Majeure? The concept of Force Majeure allows the parties to negotiate their contract and provides the ability to exercise your rights to cancel without liability. However, there are two main requirements to exercise your Force Majeure rights:
The event that is occurring is indeed a Force Majeure event
The standard of impact of the force majeure event to your room block and/or meeting or event. You must establish that the Force Majeure event that is happening has a specific impact on your ability to hold the meeting at the hotel property (often referred to as “commercially impracticable/illegal/impossible”).
2) Include the Purpose of Your Event in Your Contracts
Why? Barbara recommends her groups to really articulate “what’s the purpose” of your meeting and what’s the critical mass that you need in order to fulfill that purpose (i.e. your event includes a tradeshow, networking is a major component of the event, your meeting consists of hands on training, your attendees are traveling to your meeting from international locations, etc.). By having language that clearly states the purpose of the event, your argument is that much stronger that your event or meeting is commercially impracticable.
3) Get familiar with Commercially Impracticable
Commercially Impracticable means you could still technically have your event, but the purpose of the event is ruined.
Consider this scenario: You currently have a signed contract with a hotel for an upcoming event, the hotel is still operating, but your attendees are not able to attend because they are under stay at home orders.
Why is commercially impracticable an important element in your hotel contracts? Because if nobody can attend your meeting due to restrictions, even though the hotel is still open, the purpose of having that meeting is now frustrated and you would be excused from the agreement.
4) Remember to properly document!
Moving forward, having a clean electronic paper trail of communication for alignment and approvals of contracts and amendments will be very important to ensure all parties feel confident executing their hotel contract. Make sure that whatever agreement you reach with your hotel partner, you confirm in writing, signed by both parties, acknowledging resolution, and releasing liability relating to the cancelled contract. And, as always, you will want to consider checking with your attorney to ensure your i’s are dotted and t’s are crossed.
5) Focus on a business solution with your hotel partner
We know these are emotional conversations during stressful times, but litigation's are expensive and can take 2-3 years, filled with uncertainty, just to reach an outcome. It is best to approach your hotel partner with a discussion rather than a demand. By recognizing the hardships your hotel partner is also feeling and approaching the conversation expressing that you’re confident by working together you’ll be able to come to a fair solution can go a long way and can save a lot of dollars.
If you were able to join us, thank you and we hope that you enjoyed the discussion. If you weren’t, feel free to follow and share the link below to review the materials. Based on the overwhelmingly positive response we’ve received, we’re planning to produce many more webinars in the Legalease with the Ladies series, so please reach out if you have a suggestion for more topics!
You can access the live recording of the webinar and download the material presented here