Source: Robin Roth, Senior Contracts Editor
E-Specs: April 12, 2005

When polling meeting planners, concerns about security and terrorism still rank at the top of the lists of issues that keep planners “up at night.” The threat of terrorist activities is still a very real issue and one that needs to be addressed in meeting contracts. If attendees become concerned and refuse to travel, how well are groups protected under the Force Majeure clause in their contracts? Homeland Security has put levels of terrorist Threat Condition advisories in place but groups often wonder at what level they will be excused from performance under Force Majeure. There is no easy answer, but there are some guidelines that should be followed to help protect your group in this area.

There are five color-coded levels of Threat Conditions for risk of terrorist attacks:

1.      Low Condition (Green). Low risk
2.      Guarded Condition (Blue). General risk
3.      Elevated Condition (Yellow). Significant risk
4.      High Condition (Orange). High risk
5.      Severe Condition (Red). Severe risk

More information can be found on the White House government web site: http://www.whitehouse.gov/news/releases/2002/03/20020312-5.html

Including the following elements in the Force Majeure clause will help insure that it is worded as tightly as possible for protection against elevated terrorist advisories.

• Use a broad standard. A Force Majeure clause will often provide excuse of performance only if attendance is illegal or impossible. These two parameters alone will probably not cover an elevated terrorist advisory, so add a broader term like “inadvisable.”
• Include a catch-all phrase. Make sure the clause includes an all-encompassing phrase like “or any other emergency beyond the reasonable control of either party” that will cover situations not itemized.
• Benchmark the percentage of attendees affected. Bolster the clause by providing detail that can be documented, like a specific percentage of contracted attendees who are prevented from attending, say 25%.
• Be specific. If the group is especially concerned about elevated terrorist advisories and/or would be particularly affected at a certain level, add that contingency directly to the clause. Include something like “an orange or red Homeland Security Threat Condition” in the list of specified emergencies.
• Excuse attrition. If the group could legitimately be excused from performance but decides to go ahead with the meeting anyway, it may suffer decreased numbers and incur attrition. Be sure that the group is excused for these charges.

Be aware that excuse of performance is generally not successful if the request is made significantly after the Force Majeure event occurs or merely for economic reasons or because attendees are unwilling or afraid to travel. Excuse of performance will usually be successful only for unforeseen emergency situations as set forth in the contract language and as well documented as possible.

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)