Force Majeure: What It Means & How to Handle It

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force-maj

It’s almost time.  The A/V contract is signed.  Trade show services have been ordered.  Final numbers have been guaranteed.  You are counting down the last several hours before your event.

And then suddenly, it happens.  An unplanned complication.  A natural disaster.  Force majeure.

 Force majeure, or “superior force” in French, refers to a clause which exempts the contracting parties from fulfilling their contractual obligations due to unforeseeable circumstances beyond their control.  These can include, but are not limited to: Acts of God, Acts of War, Acts of Government and Civil Disturbances.

In late September 2018, the Ottawa-Gatineau area was hit by a tornado outbreak.  Stemming across the U.S.’ Great Lakes region and the National Capital Region of Canada, 6 tornadoes touched down, causing blackouts that affected almost half a million properties and leaving devastation and destruction in their wake.

A provincial association was getting ready to host 150 industry professionals from the Ottawa area for a full-day Continuing Education conference that weekend.  Those travelling from out of town were met with a series of endless delays and the local traffic caused by outages left the city’s roads a mess.  There were genuine concerns as to whether or not attendance would be affected by the natural disasters.  Immediately, discussions began about how such a setback would be handled and the measures to be taken in the event of further distress.

Thankfully, the show’s attendance was hardly affected.  They even received over a dozen on-site registrations that morning.  Still, we are in the business of preparedness and while you can’t control everything, you can be prepared for (almost) anything.

Here are some tips to help you handle force majeure every step of the way, from negotiating and planning through to execution:

NEGOTIATING:

  • When negotiating contracts, be sure to include the word “impracticable” along with “illegal” and “impossible”. This means that an external cause has made hosting the event more burdensome or unsafe.
  • Consider adding quantitative parameters or framework to help you gauge whether or not it’s time to invoke the clause, such as “any emergency that prevents at least 20% of attendees from attending the event”.
  • Ensure the clause is balanced. Reciprocity is a valuable way to protect your client’s interests (and their bottom line).

PLANNING:

  • Conduct a Risk Assessment and consider the context of the event in your review. What potential problems may arise?  Are procedures or policies already in place for these circumstances?  If not, should any be created?  Who will be responsible for development and action?
  • Devise a Crisis Management Plan. Your plan should be comprised of three stages: Anticipation, Backup and Crisis Management Mode.
    • Anticipate the likelihood of a mishap and arm yourself with potential resolutions.
    • Prepare a backup plan in the event Plan A goes awry. Draft policies and assign responsibility accordingly.  Gather contact information from all key parties.
    • If needed, Crisis Management Mode will draw on your experience, intuition and the resources at hand to provide reassurance and security to your attendees. This is the final escalation of your action plan.

EXECUTION:

  • If you do need to implement your Crisis Management Plan, always remember to stay calm. People need to be kept informed without becoming alarmed.  Excessive panic can hinder rescue operations.
  • Trust your gut. If the situation is escalating, do not hesitate to begin implementation of your plan.  The longer it takes to address a crisis, the longer it will take to end, so work towards a resolution quickly and efficiently.
  • Prioritize internal communications. It is imperative that your team is kept in the loop at all times and that all parties are aware of their roles once the plan has begun.  Be careful not to neglect external communications in the process, though.

POST-EVENT:

  • Review all major problems that occurred to determine what went wrong. Use your findings to develop preventative processes for future events so that they don’t repeat themselves.

There are always risks associated with any event.  What’s important is ensuring that you are prepared for them and well-equipped to handle the aftermath.  Make the distinction between things you can control and things you can’t and apply this to your risk management and assessment.  Get ahead of any potential problems you feel may arise and use your know-how to handle emergencies calmly and effectively by always having a plan.

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

For more information on force majeure, check out Heather Reid, Founder & CEO of Planner Protect and venur contract negotiations expert at PlannerProtect.ca

 

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