A quick guide to Force Majeure you can actually understand
Ever since COVID rocked our lives and our businesses the term ‘force majeure’ has been thrown around a lot.
But what does force majeure actually mean?
Today we’ll cover just that. In language anyone can understand, even if you didn’t pass the bar.
What does force majeure mean?
(Don’t mind as we get a little European here for a moment.)
Force Majeure is a French word meaning a superior force that prevents the purpose of a contract from occurring outside of the control of either party.
What are examples of ‘superior force’?
Act of God, or Act of Man are the two main categories of superior force.
Acts of Man could be riots, war, lockdown, governmental order, etc.
Act of God could be pandemic, epidemic, COVID-19, etc.
Either way, a superior force is basically an event that is outside both your and your client’s control.
So in summary force majeure is when an Act of God or Act of Man outside your or your client’s control ceases the purpose of the contract of taking place.
In relation to COVID that would mean if a contract states the purpose of the contract was to host a wedding of 200 people, and a lockdown or governmental order happened on the event date, meaning only 4 people could be together at once, the purpose of the contract (a wedding of 200 people) cannot occur, due to no fault by either party entered into the contract.
This is an example of a situation where force majeure applies.
So how does force majeure affect your contracts and most importantly, the payments client made to you?
Having a properly worded Force Majeure Provision is essential to being able to retain any non-refundable payments made by the client, even in the event of a force majeure event taking place.
Will my non-refundable deposit hold up in court if I didn’t provide my services because a force majeure event occurred?
If your Force Majeure clause is worded correctly, yes, your non-refundable deposit should indeed hold up in court.
Your Force Majeure provision should refer to your payment provision and cancellation payment provisions, indicating that those provisions apply in the case of a force majeure event and in the case of a force majeure event causing the cancellation of the event/project/service.
Therefore, if your cancellation provision states (as it should) that in the case of a cancellation, the non-refundable deposit is not refunded, that would apply in the case of Force Majeure occurring.
If after looking over your Force Majeure clause it doesn’t state that, you may download a complimentary copy of our Force Majeure provision below.
Is my force majeure provision up to snuff? What should my force majeure provision cover?
Generally speaking, your Force Majeure should cover the following:
That you and your client are excused from further obligations when a Force Majeure event occurs
A definition and examples of what a Force Majeure event is
What happens when a Force Majeure event occurs (eg. give notice to the other party) and when
When is the notice deemed to be effective
What happens to payments
Again, if yours doesn’t cover all of the above thoroughly, feel free to download a free copy of our Force Majeure provision which may be added to your current client contract.
How do I explain Force Majeure to my client?
We probably could have never predicted this a year ago, but now when clients are booking in, they’re asking about Force Majeure before even booking.
A number of members on our CLS team are currently planning weddings, and rightfully so, they’re asking vendors about what happens in the case of another lockdown on their wedding date before they book in.
When explaining Force Majeure to either your current client or a potential client, explain that you don’t want to hold them to the contract if a Force Majeure event has occurred.
You’ll want to be upfront and honest from the get-go about how Force Majeure occurs so all their questions about how Force Majeure gets handled are clear and covered.
If you purchased your client contract from us, your payment schedule will already be written out clear as day. Your Force Majeure provision should refer back to your payment provision with the payment schedule and the cancellation provision with another payment schedule.
When Force Majeure occurs, these payment schedules are the ones that will be applied.
So when explaining to your client what happens in the event of Force Majeure, state that the relevant payment provision (ie. regular payment provision or cancellation payment provision) applies.
Should I get my force majeure provision reviewed by an attorney in my state?
The short answer: Yes.
Force Majeure laws vary greatly from state to state, so it would be wise to have someone in your state look over any Force Majeure provision, either the one above we are providing you for free or any other you may have. In addition, and this is critically important: we know that as time goes on, you’re most likely naturally making tweaks to your contract template. This is completely natural- sometimes, our clients provide great suggestions on provisions that should be added.
That being said, over time, your contract may (legally speaking) be a completely different document than you originally started with. As a business owner, it is your responsibility to ensure that your force majeure provision aligns with other critical sections of your contract, such as your payment and cancellation provisions. Too many times, we see business owners try to do the right thing by making necessary updates to their contract (ie, beefing up their force majeure provision when a global pandemic hits), but the key to contract law? Your contract is a puzzle. Make sure the pieces fit together.
We know a lot of creatives are nervous to turn to an attorney to get personalized advice because of the cost, but the good news is, if you simply need the attorney to review something, that’s a lot more affordable than paying them for the 10 hours it would likely take them to draft an entire contract.
