If you have the contract in front of you, check the following:
Does the contract contain a force majeure clause? (what this clause means you may find out in our blog post COVID-19 and Contracts: This is Why You Will Be Reading Them More Carefully After the Pandemic).
- If it does not, in such a situation the force majeure provisions of the applicable law will be relevant. If it is Serbian law, it provides that the debtor shall be released from liability for damages if he proves that he could not fulfill his obligation, that is, he was late in fulfilling his obligation due to circumstances arising after the conclusion of the contract which he could not prevent, eliminate or avoid.
If the law of another country should be applied, we advise you to check the provisions of the relevant legislation to see what the consequences of canceling the event are.
Also, remember to provide a force majeure clause in your future contracts, since it may become relevant suddenly, just as the circumstances which define it, so that you can specify what shall be considered a force majeure and what consequences it shall cause in your contractual relationship. It’s always easier to play by the rules you make, than by the ones someone else imposes.
- If it does, check the following:
Is the epidemic predicted as a form of force majeure?
- If it is, check if the outbreak of the epidemic relieves you of contractual obligations or at least limits your liability for its failure.
- If it is not, know that force majeure clause generally determines its types, so check if an epidemic case can be brought under one of those types. Usually it can, so the next step is to look at the legal or contractual consequences it causes. And that is the end of this path – we have reached our destination – the consequence of canceling the event.
You should also be careful and check whether there is a clearly stipulated obligation to inform the other contracting parties of the inability to fulfill the obligation within a certain time-frame (event cancellation) in order to be released from the obligation.
And just one more note for the end: the party claiming force majeure relief is usually under a duty to show it has taken reasonable steps to mitigate or avoid the effects of the force majeure event. For example, have you considered whether the event could be postponed, reduced in size or held with further safeguards in place? Of course, if there is a prohibition on gathering, no alternatives are possible, other than the online event.
This may seem complicated, but no one expects you to know these legal rules. However, if you are in this situation, it would be best to consult a lawyer, having in mind the possible consequences.