Force majeure translates literally from French as “superior force.” In law, the term often arises in the context of a force majeure clause in a contract, which is a clause that is meant to protect the parties to a contract in the event that all or part of such contract cannot be performed due to causes that are outside the reasonable control of the parties and could not have been avoided by the exercise of due care. Force majeure clauses have vaulted to the top of the contractual pecking order these days, thanks to the COVID-19 pandemic. Depending on their drafting, such clauses may have a variety of consequences, including: excusing the affected party from performing the contract in whole or in part; excusing that party from delay in performance, entitling them to suspend or clai… With respect to contracts in the United States, the question of whether and to what extent contractual obligations may be excused rests largely on the terms of any force majeure clause that may or may not exist in the applicable contract. This reflects the principle of pacta sunt servanda, which is Latin for “agreements must be kept.” If a contract has no force majeure clause to look to, the parties must fall back on the legal doctrine of impracticability, which is extremely vague and difficult to prove. Atlanta-based attorney John S. Foster has been preparing and revising hotel group contracts for nearly three decades. if (breakpoint==""){ OAS_site = 'mc'; The UCC provides for the basic assumption that if there is a world-altering event and contract performance has become impracticable, the performance of some terms or expectations of the original contract may be … renderslot(path,'[[30,50],[728,90],[970,250]]', 'div-gpt-ad-Top','Top'); Or, if there is a force majeure clause is the contract, quote the relevant portions of that clause that support your position that the clause applies to the Coronavirus pandemic.] } j=d.createElement(s),dl=l!='dataLayer'? [1] Force majeure events typically enumerated in contracts include: One often doesn’t know the extent of one’s insurance coverage until a calamity occurs. Under these contracts, it helps to show evidence of actual cancellations by … Ideally, a force majeure clause will specify exactly what events allow the clause to be invoked. Even if a force majeure event is specifically covered by the force majeure clause, one should not assume that all performance is automatically excused. Some contracts permit cancellation if a force majeure event prevents or unreasonably delays attendance of a certain percentage of the event attendees (for example, 25 percent); other contracts include such a percentage of attrition as a requirement for cancellation under force majeure. With any meeting or event, there are myriad contracts in place: hotels, convention centers, decorators, audiovisual companies, and destination management companies, to name just a few. As part of operating a hotel we know that there are a large number of supply contracts in place, so it is of no surprise that we are frequently being asked whether the COVID-19 pandemic would constitute force majeure and would allow contracting parties to rightfully terminate contracts. Definition of "without liability": When stated in any provision of this Agreement, "without liability" means that there will be no liquidated damages, attrition fees, cancellation fees, rental charges, service charges, or any direct, consequential, compensatory, special incidental damages or any other damages or amounts of any nature whatsoever. renderslot(path,'[[320,50],[300,50]]', 'div-gpt-ad-mobile-Mobile-Bottom','Mobile Bottom'); Code § 3526: “No [wo]man is responsible for that which no [wo]man can control.” Generally, a force majeure clause is triggered when the occurrence of aforce majeureevent, sometimes generally referred to as an “act of God,” ultimately renders performance so impracticable that it is excused. From a contract perspective, force majeure has always “just been one of those clauses,” like the general clause at the back of every contract, Hare said. Designed to absolve one or more parties from performing contracts when The Unthinkable happens, they typically list specific events from a "parade of horribles" and sometimes even provide a catch-all provision to cover unforeseeable crises. The following force majeure clause from M&C's legal expert, Jonathan T. Howe of Chicago's Howe & Hutton firm, is relatively general and should be used as a guide. renderslot(path,'[[320,50],[300,50]]', 'div-gpt-ad-mobile-Mobile-Top','Mobile Top'); If parties intend adverse weather conditions, war, civil commotion, riots, strikes, and labor disputes to excuse contractual performance, the force majeure clause should specifically include those events. OAS_IsHome = false; Article - Coronavirus As Force Majeure Event – What Hotel Owners and Operators Should Consider - By Jim Butler - Coronavirus continues to be of … renderslot(path,'[[300,250],[1,1]]', 'div-gpt-ad-Right2','Right2'); 'https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f); gtag('js', new Date()); Contracts will start to become more focused as people look at what the definition of force majeure in hotel management agreements is and will try to add or remove things, she said. Joshua M. Bowman is a partner in the firm’s Real Estate and Corporate departments and is chair of the firm’s Hospitality Practice Group. renderslot(path,'[280,49]', 'div-gpt-ad-Article-Sponsor','Article Sponsor'); Judges will construe a force majeure clause with close attention to the words in the clause and with regard to the general terms of the contract. According to legaldictionary.net, force majeure means “superior force.” In the world of event-planning, planners know force majeure as the “Act of God” clause. The above discussion should be extremely relevant for hotel owners and operators.
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