The Coronavirus & Your Creative Business
Learn how to avoid a breach of contract scenario.
As we are all too aware by now, the Coronavirus is quickly becoming a global concern, from both a health and economic perspective. Now, there are plenty of articles and resources out there discussing those concerns in greater depth, but today, I want to hit on another aspect to consider: how will the Coronavirus affect the wedding industry?
More specifically, how can you avoid liability from potential breach of contract claims?
While the threat of the virus may feel far away from you right now, there are contractual elements that require examination right now. At first blush, it’s easy to write off the virus’ threat to your business if you are not performing work in the immediately affected areas- for example, you may not be preparing for a destination wedding in China or Milan. However, the truth of the matter is, the wedding industry is global, and ripple effects are already being felt in indirect ways. At the time of this writing, (aside from destination weddings), the two largest areas of the wedding industry that are being affected are those that rely upon exports from China - namely, the wedding dress and floral industries. No matter what type of industry work you perform, this is critical to understand: what happens when a force outside of your control makes it (legally) impossible to perform your contracted services? You look to your contract, of course.
The wedding industry is global, and ripple effects are already being felt in indirect ways.
Here are the first provisions you should examine to ensure that your contract can protect both your business, as well as your business relationship with your client in light of potential 3rd party claims:
Look to your cancellation provision: Do you have an “incapacitation” provision that provides for “unexpected circumstances outside of the [Vendor’s] control? This provision would be critical if you were, say a wedding dress shop unable to deliver a dress to a bride on time.
Force Majeure: this has been the most widely debated (and appears to be the most widely agreed-upon) provision in the legal world internationally. “Force Majeure”, as defined by Black’s Law Dictionary, means “[‘French for ‘a superior force’] An event or effect that can be neither anticipated nor controlled. The term includes both acts of nature and acts of people.” Every contract should have a force majeure provision, to begin with, but in short, your force majeure provision should address “situations outside of either Party’s control.”
Dispute Resolution: Finally, again, every contract should have a dispute resolution clause. In other words, what happens if a scenario does arise that requires termination, cancellation, or creates a scenario of impossibility within a business relationship? You need to have your dispute resolution scenario mapped out before that scenario has an opportunity to arise. Determine, and then spell out the specifications of how such a scenario will be handled: mediation, arbitration, or court.
Above all else, if you are a wedding professional who is affected by the coronavirus, or think that you may be: be proactive. Be open, honest, and communicative with your client. And most importantly: speak to your lawyer about what he or she suggests as the appropriate course of action for your business.
