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Contract Cross Examination, Part 3: What Falls Under Force Majeure?

Attorney Tyra Hilliard takes on questions about acts of god, acts of politicians, and other potential situations that could make your event “illegal, impossible, or impracticable.”

Many people aren’t quite sure what rises to the level of force majeure to make an event “illegal, impossible, or impracticable” to hold. During a recent MeetingsNet webinar, attorney, speaker, and College of Coastal Georgia professor Tyra Hilliard, Esq., PhD, CMP, was asked a lot of questions on everything from “bathroom bills” to travel bans as potential force majeure situations during her session on what she calls The Big Three contract clauses (the other two being attrition and cancellation).

Here is a sampling of questions related to force majeure—as well as more general legal questions—along with Hilliard’s responses. (See Is Your Meeting Illegal, Impossible, or Impracticable? for Hilliard’s four tips on developing an effective force majeure clause.)

Contract Cross Examination, Part 1: 9 Tough Attrition Questions
Contract Cross Examination, Part 2: What’s in Your Cancellation Clause?
Food and Beverage Guarantees: The Other Attrition
Yes, You Do Need a Cancellation Clause
Is Your Meeting Illegal, Impossible, or Impracticable? 

Would the Trump administration’s recent travel ban fall under the force majeure clause?
Hilliard: Anything that disrupts travel that is beyond your control could fall under force majeure. The test is truly, “Does it make it illegal, impossible, or impracticable” to hold the meeting? I would add something to force majeure like, “Anything beyond the control of the parties that prevents at least x percent of attendees from traveling to the meeting.” This covers travel policies and also airline computer crashes, bad weather in a hub city, etc. 

Have you ever seen a force majeure clause fought over the belief/disbelief in “god”?
Hilliard: Ha! No, but I appreciate the distinction.  “Acts of god” (little g) is a legal “term of art”—meaning it has acquired a specific meaning under the law. It’s not religious. If someone doesn’t believe in God (big G), it doesn't negate the legal meaning of the phrase. This is yet another reason I prefer that we call the clause a “force majeure."

Will the introduction of Texas Senate Bill 6 [which would require people to use bathrooms based on the biological sex listed on their birth certificates] be enough reason to cancel a group's contract?
Hilliard: Short answer—probably not. Remember, it only falls under force majeure if it makes it “illegal, impossible, or impracticable” to hold your meeting. While I personally believe Texas Bill 6 to be distasteful, that's not illegal, impossible, or impracticable. I encourage you to put in a separate clause that addresses any policy, law, or administrative decision that violates your mission, vision, code of ethics—whatever you can point to that addresses human rights. 

Do you have a real-world example of “frustration of purpose” for force majeure?
Hilliard: The classic example is: A pharma company has planned a product launch for its new drug. The FDA does not approve the drug. Purpose: frustrated. But in a greyer sense, try this: Suppose your meeting was an educational seminar on pre-natal care for women. Zika virus strikes and the biggest risk is to pregnant women and their unborn children. To me, this would frustrate the purpose of the meeting.  Frustration of purpose is always arguable, though.

Other Questions
While they had Hilliard on the line, some audience members had other legal questions they wanted her to address, including:

What are your thoughts on a “no-walk clause”?
Hilliard: You can put a “no-walk” clause in the contract, but that doesn’t mean that the hotel can’t walk your guests. It just means that they may owe you (or the guest) something if they do. Still, it may dissuade the hotel from walking your guests and that’s really what you want. So it’s worth a try. Be sure to give the hotel a list of your VIPs so they don’t walk them at any cost. 

How do you suggest sending the edits to the contract to the hotel? Should you add an attachment to the contract and wait for them to update the contract?
Hilliard: Noooooo. Get the contract as a Word document and use the track-changes function. Too many changes “accidentally” get left out otherwise, in my experience.

How successful have you been in negotiating your clauses into your contracts?
Hilliard: Very successful with clients who are truly willing to walk away or choose an alternate facility if the terms of the deal are not met. Meeting planners shoot themselves in the foot when they go into a negotiation without leverage. If the hotel knows you won’t walk, they have less incentive to negotiate. Of course, some of the success depends on how attractive your meeting is as a piece of business. 

A lot of our groups require gender-neutral bathrooms—and like to get it in the contract. Is it discrimination if a hotel won't provide this?
Hilliard: No, this doesn’t rise to discrimination in my opinion. Hotels either have gender-neutral bathrooms or they don't. They shouldn't be required to reassign them for an individual group. This sounds like an opportunity to create a resource that others in the industry might need—a list of hotels with gender-neutral bathrooms. Maybe more hotels would install them if they see they are being excluded from consideration without them.


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