COVID-19 Contract Cancellations
The novel Coronavirus has caused many people to have to cancel or reschedule their events, stop performance of work, and lose money on deposits or deals made with venues. There are ways that you could potentially get your money back, but it's all about how your contracts are written.
When an unforseen event happens that jeopardizes your ability or the other party's ability to perform on a contract, you may have an out. The out usually comes in one of two forms: a force majeure clause or frustration of purpose.
A force majeure clause is contained in a majority, but not all contractual agreements. This clause protects the contracting parties from interfering "acts of god" that may impair a party's performance to a contract, such as: an earthquake, a hurricane, war, insurrection, etc. A pandemic, such as the novel coronavirus, may qualify as an "act of god" and may allow you to cancel the contract under its force majeure clause. If your contracts clearly say that a pandemic is a force majeure event, then you're in luck! If they don't, there's more risk that the pandemic caused by COVID-19 may not be covered because it is so new and it's an untested theory. That said, if you have a broadly written force majeure clause, the chances are it would be covered given the unpredictable nature of the Coronavirus.
The alternative option to get out of performance or breach of your contract due to Coronavirus is if the contract was created for a purpose that was destroyed or unreasonably interferred with and/or became illegal. For example, if you paid a deposit to a hotel to host your wedding at their venue on May 3rd, 2020, when a majority of states were in lockdown and prohibiting gatherings over a certain size, you are likely entitled to get your deposit back, because the laws in place by your specific state made it illegal to host your event at the hotel or have more than 10 people attend, when you were supposed to have a guest count of 200. In cases such as these, it's likely that you'd be entitled to cancel your contract without any reprecussions, but it all depends on what the agreement was between you and the other party and the details that had been exchanged.
If you have any questions about whether or not you're entitled to cancel your contract or whether performance is required due to the wrench that COVID-19 threw in your plans, contact us and we'd be happy to help you find out!
