As a meetings industry attorney I get a call every week with the same question asked different ways. Sometimes it’s “We booked our meeting in a state that has a new discriminatory bathroom law and now our attendees want to protest by canceling; what can we do?” Other clients ask “Our next conference is at a hotel owned by the President; can we move somewhere else?”
These clients are asking the same question: They are raising a political controversy or change in a local law that makes the location undesirable to some as a meeting destination. The clients are asking if it would allow them to cancel meeting contracts, including agreements with hotels, venues, and other suppliers.
The answer, in almost every case, is “no”. Political disagreements and objections to new laws – even those you consider morally repugnant – do not constitute reasons to cancel in most meeting contracts. They are not “force majeure” or “act of God” occurrences that trigger cancellation without liability clauses, since the offensive occurrence does not make it illegal or impossible to hold the meeting.
If a group wants to cancel, it can still do so and pay cancellation damages to its venues and suppliers. The damages formula usually appears in the meeting contract. They should approximate each vendor’s lost profits arising from the cancellation.
That’s not a satisfactory answer for most meeting hosts, since damages are costly. So what else can be done? Fortunately there are alternatives, if you plan ahead in the contract.
For planners, the first step is to consider your group’s needs. For corporate groups that may be less sensitive to social issues, controversial political and legal changes might have less impact, and therefore would not require a special clause. But for voluntary associations, religious groups, and more socially conscious gatherings, this issue may require serious consideration.
The key question for planners is “what kind of political and social changes would cause attendees to cancel?” Would it be an anti-LGBTQ law? A new rule negatively impacting civil rights? An adverse election result? Those hot-button issues that would trigger cancellations for your group should be accounted for in the meeting contract.
Identifying the important cancellation factors is important; but negotiating an effective cancellation clause is perhaps the toughest task. It is important to protect the group’s interests, but to also be fair to venues and other suppliers. A clause that would allow the group to cancel the meeting for virtually any reason, without proof that the controversial legal change or policy caused attendees to cancel, would likely be rejected by suppliers, and for good reason.
It may also be unreasonable to expect suppliers to give a group cancellation flexibility in a high-demand market, where the venue and other suppliers can choose among groups willing to pay peak rates.
A proper clause allowing cancellation for political controversy or change in laws should include several elements, including:
- Group’s identification of an unanticipated and material political issue or legal change;
- Documented evidence that a substantial number of meeting attendees will refuse to attend the event due to the controversy;
- An opportunity for hotels and other suppliers to respond to attendees’ concerns;
- Proof of continued cancellations of attendance due to the controversy as the meeting dates get closer; and
- Alternatives to meeting cancellation, such as waiving attrition damages and/or reducing room blocks without liability to group.
These cancellation clauses are not “one size fits all”. The exact language will depend on the needs and flexibility of the planner and suppliers. But for groups concerned about controversial legal and political events that may cause attendees to cancel, proper planning in the contract to handle these contingencies is essential.
Note: This article is not legal advice. It is a discussion of issues intended to help professional meeting planners and suppliers consider their circumstances and draw their own conclusions. Legal advice can only be rendered after a discussion of your particular fact situation with an attorney competent in meetings law.
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