Proven best practice used to guide most decisions when drawing up legal contracts for events. Since COVID-19 spread to our shores, it has introduced a new set of criteria that has to be accommodated – while also introducing huge amounts of uncertainty.
“All parties to any contract need to be flexible as we do not know how the pandemic is going to affect us, how long it’ll last, if it’s getting worse or better, or how it’s going to affect our contracts or venues,” says Dr Tyra Warner, College of Coastal Georgia, in a recently Planet IMEX presentation titled Contracts and negotiations in a post-COVID-19 world. “So where usually as a lawyer I would take out as much ambiguity from a contract as possible, I now have to try to build in flexibility.”
The law as we know it has not changed. Rather we need to apply it differently.
As unsettling as this can be, the law as we know it has not changed, she adds. Rather we need to apply it differently, so that it makes sense in our new context.
With this in mind, a number of legal aspects of contracts remain the same:
- Duty of care: This is not a clause that is added to contracts, but a legal obligation which requires a business to adhere to a standard of reasonable care while providing facilities and performing services that could foreseeably harm others. In light of COVID-19, businesses have a duty of care to take measures to prevent the transmission of the novel coronavirus while carrying out their activities.
- Indemnification: Many businesses request their clients sign an indemnity clause agreeing that they will not hold the business liable for any harm or damage that comes to them through a specified transaction. Dr Warner notes that in Georgia, USA, many businesses have put up notices to warn the public that upon entering their premises, they are assuming the risk of COVID-19 and that the business will not accept any liability in the case of death or injury from the disease.
- Cancellation vs Force Majeure: These are two different avenues to terminating a contract. A cancellation is a voluntary act, whereby one party decides not to proceed with the agreement. They will subsequently be liable for any damages. Force Majeure is involuntary, and results in a contract being terminated because the fulfilment of the contract is no longer possible. Dr Warner adds that fear of COVID-19 is not grounds for Force Majeure, whereas travel restrictions and prohibitions on gatherings that directly impact your event are.
In addition to these familiar clauses, a number of new COVID-19 specific clauses are now being included in contracts. Examples of these that she cites include:
- Outlining space issues: Examples of the questions you may want to answer in your contract include: What social distancing requirements will be in place? How will changes in capacity affect room pricing? Will any spaces be shared with other events or customers?
- Specifying service requirements: How many staff will be servicing your event? Will they be the same staff for the duration of the event, or will different staff take different shifts? You could even specify that masks must be worn correctly (e.g. not under the nose).
- Services and amenities: You need to spell out what will be available, as well as how this can impact on cost.
- Cleaning and sanitation: It can also be useful to specify the cleaning and sanitation standards being used by an establishment. Ideally you want one that is endorsed by an industry body, such as the Tourism Business Council South Africa (TBCSA) ‘Travel Safe Eat Safe’ badge that is being used here in South Africa, which has the World Travel & Tourism Council (WTTC) ‘Safe Travels’ stamp of approval. This carries greater authority than an establishment creating their own set of protocols, and it is far easier to check that the protocols were being properly adhered in the case of possible negligence.
Dr Warner adds that, should you need to postpone an event, it is important to create a new agreement in writing. This should cover everything from the new dates and any changes to the event format or facilities, what the cost implications are, and so forth. This way you have something solid to work with – even if your point of contact changes.
Don’t forget – all of these guidelines do not constitute legal advice. Every contract needs to address the unique needs of each specific agreement taking place, which can vary greatly.
You can watch Dr Warner’s presentation here: