Event Cancellation Due to COVID-19: Contract Breach or Excused?

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We’ve seen the cancellation of countless shows, tours, and festivals across the world due to the COVID-19 pandemic. As a result of the unforeseen circumstance, people across the music industry have found themselves in compromised positions. Artists can no longer tour, companies are laying off people, and everyone’s source of income has been cut drastically. So when events are cancelled during this period of time, are artists penalized for breaking the contract?

Luckily, many contracts include the concept of force majeure (“superior force”) or “Act of God” which justifies the cancellation of performance under such circumstances. The clause is intended to protect both parties of the contract. However, the language of the contract determines what falls into the category of force majeure.

As for COVID-19, most force majeure clauses would excuse performances after March 11th. Since that’s when the virus was declared to be a pandemic by the World Health Organization (WHO). On the other hand, if a contract doesn’t contain a force majeure clause or if it’s too ambiguous, the party seeking to cancel the event may have to rely on other contractual defenses. The party may invoke the doctrines of impossibility, frustration, or impracticability. Certainly, with COVID-19, these doctrines would apply in one way or another.

Even though the contract is terminated by the force of nature, the venues and performers are both at a loss as a result. So during this period of quarantine and isolation, support from fans mean a lot to both parties. Especially the small local venues that do not have the biggest cash flow to support themselves during a month long closure.

You can read the details in JD Supra’s informational article.

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