By Matt Crouch
There is already talk of relaxing spatial distancing restrictions, but the ban on large gatherings is likely to endure for quite some time yet. The real problem is, no-one knows for how long.
Event managers and PCOs are caught in a real “Catch 22” right now. Do you carry on planning and spending on events even though they may be unlawful? Fruitless hard work and wasted money is hard to cop.
Even if you are an optimist and continue planning events for, say, late 2020 or early 2021, your optimism may not be shared by others. Securing sponsors and attendee registrations will be very hard indeed.
Whatever your approach, great care is needed right now in managing your existing contracts with suppliers. Let’s consider the most common problem encountered by my clients, namely the money (sometimes very large sums indeed) already paid to venue operators under venue hire contracts.
Say you have a sizeable event booked for September. You have paid substantial sums to the venue in advance.
The venue contract has cancellation clauses allowing the venue to retain considerable sums on a sliding scale: the closer cancellation occurs to the event date, the more you pay. So, if you cancel under these clauses now, you or your client will lose a chunk of money.
If you purport to terminate the contract now for “frustration of contract” or under “force majeure” clauses, you will probably “repudiate” the contract, because, right now, it is possible that the event might be allowed to proceed. The venue can then sue you for the full hiring-fee and you would also be unable to argue (later) for frustration or force majeure if the bans do remain in place.
You will need to negotiate! If possible, postpone the booking by agreement with the venue.
Try to get the venue to agree to hold all funds already paid and apply them to the postponed event. Also try to have the venue agree to a modified cancellation and force majeure regime for the postponed event – so that if the bans are not lifted by a certain date, you can get an acceptable or even a full refund. Negotiate on a “without prejudice” basis, and properly document these new arrangements!
Venues, if they are reasonable and want to preserve their relationships with event managers and PCOs, will have to listen and accommodate such requests. You guys have bargaining power! And as a carrot for agreeing to such modified postponement deals, you may be able offer to lock in future bookings, so that the venue can count on your repeat business for one, two, or even three more events.
Matt Crouch is the principal of Matt Crouch Legal and can be contacted at email@example.com