This article was first published in Event Magazine in November 2008
The western world is facing financial armageddon, but you can protect yourself against cancellations. Insurance is vital, but the area on which I want to focus is contractual.
Try to ensure contracts with suppliers are ‘back to back’ with the ones you have with customers. If your supplier lets you down and has a contractual escape hatch, you have a similar provision with your customsers to protect yourself against potential liability. This can also work the other way round, so if your customer cancels an event, you are protected vis-a-vis your supplier.
If cancellation is addressed in the contract, the mechanics for computation should be set out: any notice of cancellation will only be valid if made in writing and sent by recorded delivery; there is a sliding scale of cancellation fees based on a percentage of the project price and tied into the length of the gap between the date of the notice and the agreed start date (the shorter the gap, the greater the percentage should be); and thirdly, the right to a cancellation fee and to be recompensed for costs.
Without such clauses, you could be chasing shadows as the parties argue what is reasonable.
Hopefully, this article will have helped you to determine your legal position. However, if you have a specific problem, please contact us.
© This article is copyright Simon Halberstam LLP 2008 and should not be construed as legal advice or opinion in any specific facts or circumstances. the contents are intended for generic information purposes only. You are urged to contact a suitably qualified lawyer for specific advice.