You've probably heard "force majeure" being thrown around a lot lately, especially if you produce events and are dealing with canceling or postponing your event contracts due to Coronavirus.
It's a clause commonly found in contracts and it's French for "superior force."
Patrick McKenzie of Stripe recently gave a great overview behind the term:
Force majeure is a common contractual term which gives a party an out for performance without it being a breach by saying "Look, it’s not me, circumstances have just made this impossible."
Language might look like:
The Force Majeure shall include, but not limited to, act of God, acts or orders of governmental authorities, fire, flood, typhoon, tidal wave, or earthquake, war (declared or not), rebellion, riots, strike, or lockout
The sticky part is when each side may not agree what triggers this clause or not. A panic about a pandemic is not a force majeure event, but a pandemic is.
That's why we've seen big events like SXSW 2020 wait to cancel until Austin's mayor declared the city and county a local state of disaster.
Meanwhile, SaaStr is having a harder time enacting force majeure for some of their contracts, likely because they postponed after Santa Clara recommended (but not ordered) large gatherings be cancelled.
Obviously SaaStr made the right move by listening to the recommendations but since the government didn't order all gatherings to be canceled until March 13, force majeure was up for debate.
Patrick McKenzie continues:
Governments declaring a state of emergency is a consequential act in the real world, because they have sufficient stature to say "Our determination of whether there is or isn’t one is definitely not colored by desire to see a result in this case."
As Steve Adelman, a lawyer who focuses on risk management and litigation regarding live events said in a recent roundtable discussion on Coronavirus and the events industry:
Now as a practical matter, this COVID-19 crisis is going to require people to communicate and work together. We have to, so our industry can survive this.
Even if your event doesn't have a force majeure clause, you may still be able to rely on defenses around the doctrine of "impracticability" and "frustration of purpose."
For ongoing resources and to see how it's affecting not just event producers but contractors, creatives and performers, keep an eye on the #forcemajeure hashtag on Twitter too.