Contracts, Crisis Planning & Your Meeting

Ebola, Other Disasters and Your Meeting:

Guidelines for Dealing with Existing Contracts and Preparing Future Contracts

As government agencies in the United States and around the world discuss quarantines and restrictions on travel to cities and states where Ebola has been diagnosed, meeting sponsors are handling concerns expressed by their attendees about the hazards of air travel, both domestically and to other countries. In short, many meeting sponsors are fielding calls from worried attendees wondering about their safety in traveling to meetings in cities and countries where Ebola, or other infectious diseases are spreading, and boards may be asking planners what course of action can be taken if the spread of a disease whether real or imagined become an issue for their meeting. While concerns about the effects of Ebola to meetings seem to be fading for the moment, any issue like this is a good time to look at your contracts and make sure you are covered for the future.

Contract law provides that, absent wording to the contrary, either party can terminate their performance obligations is that party’s performance is made impossible, commercially impracticable, or the purpose of the contract is frustrated by supervening events outside that party’s control making the value of performance worthless to that party. These legal principles apply by default when a supervening act or occurrence affects the meetings and the parties did not allocate the risk and consequences in the contract. Whether specific concerns about a crisis rise to the level of any of these three standards must be analyzed on a case by cases basis while considering known facts and the terms of your contract.

This article discusses what steps meeting professionals should take when assessing whether a meeting should be cancelled based on current events and whether they have the right to terminate their contracts without liability or potential owe cancellation damages.

CONDUCT PROPER DUE DILIGENCE

Turning on the news channels, scanning blogs and reading newspaper headlines is not for the faint of heart. Current headlines are screaming at us about Ebola coming to the United States. Although the persons being affected currently are all healthcare professionals, that scenario can change overnight. As of this writing Ebola is being contained within the United States and we all hope that remains the case. Healthcare professionals are debating and having disagreements on how Ebola is spread and how an individual can contract Ebola. Thankfully the nation is keeping the lid on Ebola and the numbers of patients who verifiably have the disease are small.

Nevertheless, the traveling public is understandably nervous. Fears of getting on a plane with a person who has been exposed to Ebola are not far under the surface of the conscience of many travelers. Whether these fears are rational or irrational remains to be seen. What’s a planner to do when association or company leaders suggest that the meeting be cancelled or moved due to concerns for a fall-off in attendance because headlines are scary?

The decision to cancel or relocate a meeting to another location is a serious one. There are legal and financial risks regardless of the decision made and there are no easy answers. Before a decision is made planners must conduct proper due diligence. Here are some suggested steps:

Poll all stakeholders, i.e. attendees, officers, exhibitors, sponsors and vendors. See what the prevailing wisdom is. Do the majority support moving forward with the meeting or are their fears so strong based on negative perceptions that going elsewhere is the only path that makes sense. If a decision is made to move a meeting realize that contract law, and the specific terms in the existing contract, may not support cancelling or relocating the meeting without the payment of cancellation damages. Each situation must be analyzed on a case-by-case basis and discussed with all parties concerned, including legal counsel.
Examine the viability of having the meeting with fewer attendees and/or reduced support from exhibitors, sponsors and other stakeholders. Maybe it makes sense to keep the meeting in place even if attendance will fall short of original goals. Again, each case is different and potential contract liability must be considered.
Analyze your contracts regarding termination and cancellation language. The typical force majeure clause in convention industry contracts limits termination of the contract without liability to situations where it is impossible for one or both performs to perform. If your contract limits the right to terminate performance to situations where it is impossible to perform then current realities with Ebola probably don’t support terminating a contract without liability. Your action in canceling a meeting or relocating it to another location may involve the payment of cancellation damages. Of course, this could all change if the circumstances of the disease generate quarantines or travel advisories by the Center for Disease Control (CDC), the World Health Organization (WHO) or other authority.

Every situation involving meetings, travel and Ebola, or other disaster potentially affecting travel must be analyzed on a case-by-case basis. Don’t make the decision to cancel your meeting lightly and talk with the appropriate stakeholders and your legal counsel before deciding a course of action.

John S. Foster, Esq., CHME, is an attorney and counsel whose firm Foster, Jensen & Gulley specializes in the legal aspects of meetings and conventions, trade shows and events, and association management. He has been an associate or general counsel for more than four hundred (400) national and regional associations and companies since 1986 and has been named as one of the 25 most influential people in the meetings industry by MeetingNews. His peers have also voted John a Special Recognition Award as "Corporate Member of the Year" through the Georgia Society of Association Executives. PCMA Members voted John special recognition as its "Author of the Year" for his frequent contributions to Convene magazine. John has also been selected as a Subject Matter Expert (SME) for the MPI peer-to-peer assistance program, a speaker at the CMP Conclave, and a Platinum Speaker for Meeting Professionals International.

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