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Coronavirus and Your Event – What Happens if You Have to Cancel?

With the rapid spread of the new coronavirus (COVID-19), life has been disrupted in a variety of ways. Conferences and events have been canceled around the world while international travel has been cut back by many organizations. What should you do if your nonprofit organization has a major event but you’re worried that the event might not be able to move ahead?

Criteria for cancellation. The first step is to think through the pros and cons of cancellation and what will need to happen before you know that you have to cancel the event. Maybe it is a certain amount of cancellations, instructions from local, state, or federal authorities, or a decision by leadership that the risk of holding the event outweighs the benefits. As of the time of this post publication, many local and state authorities are advising people to avoid mass gatherings. We have no idea when those recommendations may become less restrictive, leaving much uncertainty in the near and medium term.

Your organization should be sure it relies on the recommendations of experts but realize there are practical and public reputation concerns. Look at where your attendees are coming from, their means of travel, and the nature of the event. Even if you believe the relative risk of carrying on the event is low, from a health perspective, the organization may expose itself to a reputation risk if it is the only event carried on while other organizations are canceling theirs.

From a legal perspective, there may also be cutoff dates in your contracts where it gets more complicated to cancel the nearer to the event date you get, making the decision timeline more clear.

Is there a cancellation clause? If you think there’s a decent chance you will need to cancel or postpone the event, review  your major contracts. Check the cancellation provisions – many contracts have a specific process to follow if you want to cancel. You may also be able to request refunds of amounts already paid. Conversely, you may face liquidated damages if you cancel. Those damages typically increase as you approach the event date and/or are payable immediately upon notice that you intend to cancel.

Is there a Force Majeure Clause? Some contracts won’t have a cancellation provision, but they may have a “Force Majeure” clause (or it could have both). The standard F.M. clause allows either party to terminate the contract if performance becomes impractical or impossible, and the F.M. clause typically lists a number of sample scenarios. Those scenarios often include Acts of God, war, strikes, and other scenarios outside the control of either party.

Note that the language in the F.M. clause can vary, raising or lowering the bar for termination. Some contracts use the term “impractical” or similar.  With the current travel recommendations in effect through much of the world, organizations would likely be able to rely on a F.M. clause to cancel the contract, based on continuation or performance being “impractical”.  On the other hand, if the F.M. clause uses a stricter “impossibility” standard, the contract may not be able to be terminated under the F.M. clause unless transportation to or from the venue has been fully shut down or gatherings have been fully banned.

In addition to the actual language of the F.M. clause, check to see what the effects of a termination under the clause are – in some contracts, a force majeure termination relieves you of any future obligations but does nothing to return deposits or other funds already paid.

Consult your insurer. Hopefully, your organization obtained event insurance that covers cancellation and will cover risks associated with your event. As soon as you begin to seriously consider cancellation, notify your insurer. They may have insight into how to mitigate any potential loss related to the cancellation, as well as strategies to make sure the process goes smoothly.

Whether you plan to terminate the contract under a cancellation or force majeure clause, you’ll want to consult with legal counsel and your organization’s leadership. Make sure you’re prepared to deal with the consequences of cancellation, which may include cancellation fees, sunk costs, and rescheduling challenges. Then notify your venue and service providers. You’ll also need to come up with a plan for your attendees, including determining how much (if any) of the registration costs can or must be reimbursed, and whether the registrations can be rolled over to a future event.

How to talk to your contracting partners. The conversation should first start from one of disappointment and cooperation – you wish you could move ahead, but public health concerns make it impossible and it would be in everyone’s interest to postpone. You may also have specific instructions from governmental authorities prohibiting you from continuing (or strongly advising against going ahead) with the event. Ask your contracting partners to consider working with you to reschedule the event. Hopefully, they will understand and you can move forward cooperatively.

Of course, some of your contracting partners may not want to let the contract terminate. They may demand additional payments. We recommend that you enter into the discussion with an open mind to try to reach a resolution that, while imperfect, recognizes that you had a contract that was disrupted by events well outside of everyone’s control. Rescheduling the event is a solution that might work for everyone, although there may be some costs already accrued that you will need to resolve. If a mutually-agreeable solution can’t be reached, look to the contract’s cancellation or F.M. provisions, if available, for how to proceed.

A Legal Theory of Last Resort – Impossibility. If the contract doesn’t have a termination or Force Majeure clause and your contracting partners won’t cooperate, there is one last option. The law generally recognizes “impossibility” as a justification to terminate a contract, even in the absence of a specific clause in the contract (note this is separate from a Force Majeure clause that uses “impossibility” as the threshold for cancellation). “Impossibility” is a high bar – typical examples include where the venue is destroyed. But while courts say the theory is “applied narrowly”, it is permissible where performance becomes “objectively impossible.”  The factors a court looks at (at least in New York, but you can check your local laws) are “the foreseeability of an event occurring, the fault of the nonperforming party, the severity of harm, and other circumstances affecting the just allocation of risk.”

So if your contracting partners try to force you to pay the full price for an event that cannot go forward, and you don’t have force majeure or a cancellation provision to fall back on, consult with local counsel about the possibility of using impossibility to cancel the contract.

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who we work with

Our clients are diverse nonprofit organizations with a broad range of missions, as well as for-profit companies in evolving areas such as social enterprise, corporate philanthropy, joint ventures, technology-driven fundraising, and impact investing.

A.B. Data
AB InBev Foundation
Absolut Company
American Committee for the Weizmann Institute of Science
American Diabetes Association
American Friends of the Hebrew University
American Parkinson Disease Association
Association of Fundraising Professionals
Avalon Consulting
Baton Rouge Area Foundation
Black Lives Matter Global Network Foundation
Bleeding Blue for Good Fund
Bradley Cooper’s One Family Foundation
BrightFocus Foundation
Brooks Brothers
Chadwick Boseman Foundation for the Arts
Changing Our World
Charity Defense Council
Christian Appalachian Project
Doctors of the World/ Medecins du Monde
Doctors Without Borders/ Medecins San Frontieres
Drug Policy Alliance
Duke University
Emory University
Estee Lauder Companies, Inc.
Feed The Children
Food For The Poor
Gerald R. Ford Presidential Foundation
Grameen Foundation USA
Hope for New York
International Campaign for Tibet
International Crisis Group
International Justice Mission
J. Crew Group
Johns Hopkins University
Lautman Maska Neill & Company
Lawyers Committee for Civil Rights Under Law
LSU Foundation

Marts & Lundy
Meyer Partners, LLC
Milken Institute
NAACP Foundation
National Alliance on Mental Illness (NAMI)
National Marrow Donor Program
National Park Foundation
Natural Resources Defense Council
North Carolina State University
North Shore Animal League
Operation Smile
PBS Foundation
Pernod Ricard USA
PetSmart Charities
PopSockets
Population Action International
Project ORBIS International
Public Interest Communication
Rails to Trails
Redeemer Presbyterian Church
Rockefeller Philanthropy Advisors
Save the Children Federation
Sesame Workshop
Simon Wiesenthal
SOS Children’s Villages – USA
Subaru of America
The Little Market
Touro University
United States Equestrian Team Foundation
United Way Worldwide
University of Connecticut
University of Virginia
Vote.org
Whitney Museum of American Art
World ORT
World Wildlife Fund
YWCA USA

A.B. Data
Absolut Company
American Committee for the Weizmann Institute of Science
American Diabetes Association
American Friends of the Hebrew University
American Parkinson Disease Association
American Rivers
Association of Fundraising Professionals
Baton Rouge Area Foundation
BrightFocus Foundation
Burger King McLamore Foundation
Cancer Care
Carnegie East House and James Lenox House Association
Center for Car Donations
Changing Our World
Charity Defense Council
Christian Appalachian Project
Coca-Cola Scholars Foundation
Convoy of Hope
Cornell University
Doctors Without Borders/ Medecins San Frontieres
Drug Policy Alliance
Duke University
Emory University
Feed The Children
Gerald R. Ford Presidential Foundation
Grameen Foundation USA
Helen Keller Services
Hope for New York
Human Rights Watch
Humane Society of US
Indiegogo
International Campaign for Tibet
International Crisis Group
International Justice Mission
Japanese American National Museum
Johns Hopkins University
Lane Bryant Charities
Lautman Maska Neill & Company
Lawyers Committee for Civil Rights Under Law
LSU Foundation
Mattel
Meyer Partners, LLC
Milken Institute
National Breast Cancer Coalition
National Marrow Donor Program
Natural Resources Defense Council
North Carolina State University
North Shore Animal League
Obama Foundation
Operation Smile
PBS Foundation
Pernod Ricard USA
PetSmart Charities
Population Action International
Project ORBIS International
Public Interest Communication
Rails to Trails
Redeemer Presbyterian Church
Rock and Roll Hall of Fame and Museum
Rockefeller Philanthropy Advisors
Sesame Workshop
Simon Wiesenthal
SOS Children’s Villages – USA
Steinhardt Foundation
Subaru of America
United States Equestrian Team Foundation
University of Montana Foundation
University of Nevada, Las Vegas Foundation
Whitney Museum of American Art
World ORT
World Wildlife Fund
YMCA USA
YWCA of New York City
YWCA USA

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news & events

Our attorneys’ recent contributions to the media and nonprofit sector publications.

news & events

Check out our attorneys’ recent contributions to the media and industry publications.

Secure Your Data – Seriously, AFP New York Chapter News
As Jon Dartley, a data privacy and security attorney at Perlman and Perlman says, “It is vital to have the appropriate legal terms in the contract to protect your interests.”  Find out what your liability limit is.  Have it in writing who bears the responsibility and cost of a data breach.  And, have the vendor agree on a specific timeframe within which they need to advise you of a data breach.

Warning: Don’t Cut Legal Corners When Mixing Social And Business Impact,  Forbes
Particularly striking is that (Karen) Wu believes this is the “first multi-state regulatory activity involving cause marketing in almost two decades.”

Is stealing, then giving back, OK?
Cliff Perlman lends his advice on theft within a nonprofit.

Buyer Beware: Negotiating Terms in Technology Agreements
Jon Dartley provides tips on negotiating contracts with technology vendors.

Four Ways Charitable Giving Could Change with a Tax Overhaul
Cliff Perlman remarks on the possible threat of a change to charitable deduction.

How To Deal With Residual Data, Nonprofit Times
Jon Dartley’s advice on addressing “data exhaust”.

Secure Your Data – Seriously, AFP New York Chapter News
As Jon Dartley, a data privacy and security attorney at Perlman and Perlman says, “It is vital to have the appropriate legal terms in the contract to protect your interests.”  Find out what your liability limit is.  Have it in writing who bears the responsibility and cost of a data breach.  And, have the vendor agree on a specific timeframe within which they need to advise you of a data breach.

Warning: Don’t Cut Legal Corners When Mixing Social And Business Impact,  Forbes
Particularly striking is that (Karen) Wu believes this is the “first multi-state regulatory activity involving cause marketing in almost two decades.”

Is stealing, then giving back, OK?
Cliff Perlman lends his advice on theft within a nonprofit.

Buyer Beware: Negotiating Terms in Technology Agreements
Jon Dartley provides tips on negotiating contracts with technology vendors.

Four Ways Charitable Giving Could Change with a Tax Overhaul
Cliff Perlman remarks on the possible threat of a change to charitable deduction.

How To Deal With Residual Data, Nonprofit Times
Jon Dartley’s advice on addressing “data exhaust”.

perlman & perlman philanthropic sector law firm blue and green logo

click to exit page

perlman & perlman philanthropic sector law firm blue and green logo

click to exit page

silk lanterns

who we work with

Our clients are diverse nonprofit organizations with a broad range of missions, as well as for-profit companies in evolving areas such as social enterprise, corporate philanthropy, joint ventures, technology-driven fundraising, and impact investing.

who we work with

Our clients are diverse nonprofit organizations with a broad range of missions, as well as for-profit companies in evolving areas such as social enterprise, corporate philanthropy, joint ventures, technology-driven fundraising, and impact investing.

A.B. Data
AB InBev Foundation
Absolut Company
American Committee for the Weizmann Institute of Science
American Diabetes Association
American Friends of the Hebrew University
American Parkinson Disease Association
Association of Fundraising Professionals
Avalon Consulting
Baton Rouge Area Foundation
Black Lives Matter Global Network Foundation
Bleeding Blue for Good Fund
Bradley Cooper’s One Family Foundation
BrightFocus Foundation
Brooks Brothers
Chadwick Boseman Foundation for the Arts
Changing Our World
Charity Defense Council
Christian Appalachian Project
Doctors of the World/ Medecins du Monde
Doctors Without Borders/ Medecins San Frontieres
Drug Policy Alliance
Duke University
Emory University
Estee Lauder Companies, Inc.
Feed The Children
Food For The Poor
Gerald R. Ford Presidential Foundation
Grameen Foundation USA
Hope for New York
International Campaign for Tibet
International Crisis Group
International Justice Mission
J. Crew Group
Johns Hopkins University
Lautman Maska Neill & Company
Lawyers Committee for Civil Rights Under Law
LSU Foundation

Marts & Lundy
Meyer Partners, LLC
Milken Institute
NAACP Foundation
National Alliance on Mental Illness (NAMI)
National Marrow Donor Program
National Park Foundation
Natural Resources Defense Council
North Carolina State University
North Shore Animal League
Operation Smile
PBS Foundation
Pernod Ricard USA
PetSmart Charities
PopSockets
Population Action International
Project ORBIS International
Public Interest Communication
Rails to Trails
Redeemer Presbyterian Church
Rockefeller Philanthropy Advisors
Save the Children Federation
Sesame Workshop
Simon Wiesenthal
SOS Children’s Villages – USA
Subaru of America
The Little Market
Touro University
United States Equestrian Team Foundation
United Way Worldwide
University of Connecticut
University of Virginia
Vote.org
Whitney Museum of American Art
World ORT
World Wildlife Fund
YWCA USA

A.B. Data
Absolut Company
American Committee for the Weizmann Institute of Science
American Diabetes Association
American Friends of the Hebrew University
American Parkinson Disease Association
American Rivers
Association of Fundraising Professionals
Baton Rouge Area Foundation
BrightFocus Foundation
Burger King McLamore Foundation
Cancer Care
Carnegie East House and James Lenox House Association
Center for Car Donations
Changing Our World
Charity Defense Council
Christian Appalachian Project
Coca-Cola Scholars Foundation
Convoy of Hope
Cornell University
Doctors Without Borders/ Medecins San Frontieres
Drug Policy Alliance
Duke University
Emory University
Feed The Children
Gerald R. Ford Presidential Foundation
Grameen Foundation USA
Helen Keller Services
Hope for New York
Human Rights Watch
Humane Society of US
Indiegogo
International Campaign for Tibet
International Crisis Group
International Justice Mission
Japanese American National Museum
Johns Hopkins University
Lane Bryant Charities
LSU Foundation
Mattel
Meyer Partners, LLC
Milken Institute
National Breast Cancer Coalition
National Marrow Donor Program
Natural Resources Defense Council
North Carolina State University
North Shore Animal League
Obama Foundation
Operation Smile
PBS Foundation
Pernod Ricard USA
PetSmart Charities
Population Action International
Project ORBIS International
Public Interest Communication
Rails to Trails
Redeemer Presbyterian Church
Rock and Roll Hall of Fame and Museum
Rockefeller Philanthropy Advisors
Sesame Workshop
Simon Wiesenthal
SOS Children’s Villages – USA
Steinhardt Foundation
Subaru of America
United States Equestrian Team Foundation
University of Montana Foundation
University of Nevada, Las Vegas Foundation
Whitney Museum of American Art
World ORT
World Wildlife Fund
YMCA USA
YWCA of New York City
YWCA USA
Lautman Maska Neill & Company
Lawyers Committee for Civil Rights Under Law

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We strive to maintain a culture characterized by respect, opportunity, diligence, mutual empowerment, entrepreneurship, and fair reward for efforts made on behalf of clients and the firm.

Perlman & Perlman is a Certified B Corporation

Certified B Corporations use the power of business to solve social and environmental problems. B Corps are unlike traditional businesses because they

  • Meet comprehensive and transparent social and environmental performance standards
  • Meet higher legal accountability standards
  • Build business constituency for good business