By Ellen Sturm Niz Posted November 1, 2012, 2:02 PM EDT
As planners, vendors, and venues navigate event cancellations and postponements caused by Hurricane Sandy, they’re likely invoking force majeure contract clauses that reduce or eliminate the liability of one or both parties due to an extraordinary event or circumstance—such as an “act of God” natural disaster like a hurricane.
Our editors have heard most venues and vendors are being understanding and working with event planners and producers to figure out solutions for events affected by Hurricane Sandy.
“All vendors have been 100 percent understanding,” said Kirstin Turnbull of Starshot, an event marketing agency in Toronto, who had to cancel events in Boston and New York because of the hurricane, though some “cost complications” were unavoidable. For example: “We had to send the A.V. truck to Boston just in case the event were to take place. We ended up having that truck turn around en route. Thankfully, all airlines provided full refunds and credits for travel.”
Turnbull is looking into when force majeure clauses apply and for how long, but she doesn’t expect her approach to contracts will change much as a result. “I personally will be looking more closely at cancellation clauses and the timelines associated,” she said. “It is always ideal that we aren’t penalized for postponement only.”
“We have only had postponements, and we are honoring date switches with no penalties,” said Jennifer Blumin, president of Skylight Group, which has several New York venues that were not damaged in the storm. Although she’s not sure legally how long “act of God” clauses apply, she said, “in terms of doing the right thing, as long as it takes.”
“We’re giving clients for events this Saturday and Monday the option of cancelling by November 1 without penalty,” said Scott Fagan of New York’s Tip of the Tongue Caterers, which survived without a scratch due to its third-floor location in Long Island City. “After that, no refunds.”
“Honestly it’s a case-by-case basis when it comes to clients getting refunded,” said Loren Michelle of Brooklyn-based catering firm Naturally Delicious. “I have a disaster clause in the contract—we’re not obliged by acts of God to make an appearance. [But the] most important thing is communication and creating the expectation that you have to be flexible. You want to create goodwill and not lose business.”
However, Michelle said she would have to bill clients for any food she has already purchased for a cancelled event: “That’s why clients should get event insurance.” But, Michelle added, “Any vendor insisting on cancellation fees is a sleazy vendor.”
For more on force majeure clauses, check out this 2007 BizBash story: “How Venue Contracts Are Changing.” For more on Hurricane Sandy and the event industry, visit the BizBash live blog: “How Hurricane Sandy Is Affecting the Event Industry.”