The world is currently in a state of emergency as the most recent strain of the coronavirus (COVID-19) continues to spread across the globe at rapid rates.
Countless people are socially isolating and quarantining themselves. Some governments in highly impacted areas – like Italy and Spain – are even banning people from leaving their homes.
Millions are left scrambling to adjust – including retreat leaders.
Postponements and cancellations of upcoming retreats are happening at light speed, leaving retreat leaders between a rock and a hard place.
If you have a retreat coming up, chances are you have a block of rooms, villa or other accommodations locked in courtesy of a contract – and you are now having a hard time following through on it.
Is it possible to cancel your contract and be relieved of your obligations under it given this unforeseen event?
Let’s take a look.
Force Majeure/Act of God Provisions
Many contracts include what’s commonly known as a Force Majeure provision. Latin for “superior force,” this language typically excuses performance by the parties to a contract when unforeseen events beyond their control make following through on the contract impracticable or frustrate the purpose of it in the first place.
Also known as an “Act of God” provision, this clause typically includes natural disasters (like tornados, hurricanes, earthquakes and tsunamis) and catastrophic acts of people (like wars, riots and terrorism).
Some contracts also specifically include pandemic events as Force Majeure events. Given its nature and recent classification as a pandemic by the World Health Organization, COVID-19 is likely considered to be a Force Majeure event.
If Your Contract Has a Force Majeure/Act of God Provision
If you are a party to a contract and it has a Force Majeure provision (look for the words “Force Majeure” or “Act of God” in the contract), there are a few things you’ll want to consider when determining if you can enforce this provision and cancel the contract.
First, in many jurisdictions, the Force Majeure event must be the sole cause of your inability to perform your obligations under the contract. If there are other factors that are contributing to your inability to perform, you very well may not be able to prove the causal link necessary to cancel the contract because of the Force Majeure event.
For example, if you are experiencing health problems now and those – combined with an inability to perform due to the COVID-19 outbreak – are the reasons why you are seeking cancellation of the contract, you may be out of luck.
The specific laws governing your contract are what determine the level of causation required to cancel a contract pursuant to a Force Majeure provision, so make sure you get adequate legal advice about your specific contract and situation.
Second, you are probably required to demonstrate that you have made reasonable efforts to mitigate (a fancy word meaning “limit”) the effects of the Force Majeure event’s impact on your ability to satisfy your contractual obligations.
If there is something reasonable you can do, you must generally show you have done it. What is considered a reasonable mitigation option must be determined on a case by case basis.
Third, you must comply with all notice provisions in your specific contract. Many contracts contain notice provisions that require an affected party under a contract to notify the other party of an intent to cancel in a timely manner.
Of course, what type of notice is required and what is considered timely depends on a few things, including the specific wording of your contract and the laws governing it.
When in doubt, read your contract several times, follow whatever it says regarding giving notice, and keep adequate, date-stamped records of all communications regarding the contract.
If Your Contract Does Not Have a Force Majeure/Act of God Provision
All this being said, not all contracts have Force Majeure provisions. If yours does not, you still may be able to cancel a contract because of a Force Majeure event like COVID-19. There are three legal doctrines recognized in many legal jurisdictions that can possibly help you.
The impracticability doctrine states that a party may seek excusal from performance under a contract if an event outside the party’s control – like COVID-19 – makes performance unfeasible. This is a great option because the standard of unfeasibility is not ridiculously high.
Meanwhile, the frustration of purpose doctrine states that if the essential purpose a contract has been frustrated by an unforeseen event, the parties to a contract may be able to cancel it. This too is a great option because a pandemic – like COVID-19 – is likely to frustrate the purpose of many retreat-related contracts.
Lastly, the impossibility doctrine states that the parties to a contract can void a contract if performance of the contract has been made impossible by an unexpected event. This is the least desirable option because it requires a high threshold – a demonstration of true impossibility to perform. This should be a last resort option.
As mentioned above, it is important to timely communicate with the other party to the contract and let him or her know of your intention to cancel.
You’ll also want to consider the cost/benefit of potentially having to defend a breach of contract action if the other party disputes your decision. Legal fees can be expensive.
Keep in mind too, regardless of whether your contract has a Force Majeure provision or not, your ability to cancel a contract because of an event like COVID-19 is time-sensitive.
Force Majeure events are limited in nature and do not last forever (thank goodness). Once a Force Majeure event has terminated, your ability to cancel a contract because of it (after the fact) will be greatly impacted. Time is a huge factor.
Do not delay in asserting your legal rights, or you may be sorry.
Seeking Legal Advice
If you find yourself in a situation where you are a party to a retreat-related contract and your ability to perform your obligations under that contract are impacted by COVID-19, it is highly recommended that you immediately seek legal advice from a qualified lawyer who is well-versed in the laws governing your particular contract.
This article does not constitute legal advice and is merely intended to educate you on some of the issues COVID-19 presents regarding contractual performance. Laws vary from state to state, country to country. The specific wording of your contract must be carefully considered by a qualified lawyer in evaluating all your legal options, which may include others not discussed in this article.
As a self-proclaimed retreat-junkie, Melanie knows firsthand the power and transformation of traveling with a group of like-minded people who are ready to dive deep into themselves. It’s pure magic!
Melanie has planned, co-facilitated and attended dozens of retreats all over the world and is beyond excited to help other retreat enthusiasts do the same. As a Retreat Blueprint Business Coach & Copywriter, Melanie specializes in helping retreat peeps crank up their businesses & add sparkle to their offerings so they shine to the cosmos and back.