The coronavirus pandemic (COVID-19) is rapidly evolving and causing widespread disruption. This includes the cancellation of many events. If your event has been cancelled due to coronavirus, you must understand what your legal obligations are. Those affected by the cancellation will include:
- attendees or ticket-holders;
- suppliers of goods or services;
- sponsors; and
- casual staff employed to run the event.
Your legal obligations to them will depend on a range of matters, including the terms of any contracts. This article will outline your essential obligations and what steps to take once the event has been cancelled.
Do You Have to Refund Ticket-Holders?
If you have to cancel an event due to government restrictions, the Australian consumer laws do not apply. Instead, the terms and conditions of your agreement with the ticket-holder will determine your obligations. This may be set out on the ticket or provided on your business’ website.
Review these terms and conditions carefully to confirm the circumstances that trigger a refund. If you have used a ticketing agent, you may also have a separate agreement with them which specified you need to issue a refund.
What Do Your Contracts Say?
Where you have written agreements with third parties providing services for the event, you should review those contracts carefully. This will include contracts with builders and suppliers, like caterers and sponsors. The contracts should set out on what basis the event may be cancelled or postponed and what your obligations are in terms of refunds.
Where the event is cancelled because of factors outside your control, such as government restrictions on holding the event, you can terminate the contract, and you do not have to continue your obligations under it. However, you will still need to pay for any work which has already been completed.
Continue reading this article below the formLook For ‘Force Majeure’ Clauses
Your contracts with third parties may include a force majeure clause. Force majeure refers to an event beyond the control of either party that prevents the performance of the contract. Where a contract includes a force majeure clause, the contractual obligations will be put on hold for the duration of that event.
Whether the coronavirus will count as a force majeure event will depend on the exact wording of the clause. If you are unsure how a force majeure clause applies to your obligations following a cancelled event, you should seek legal advice. Whether or not you can rely on a force majeure clause may also depend on when you entered into the contract.
Steps to Take to Postpone or Cancel an Event
If you need to postpone or cancel an event, you should take the following steps to minimise the chance of complaints by those affected:
- check your insurance policies relating to the event to confirm what coverage you may get for any losses you suffer;
- communicate clearly with all affected parties to inform them that an event is cancelled;
- include your refund policy in all communications and provide contact details and procedures for arranging refunds; and
- refer to contracts and any relevant clauses when communicating with third parties, such as suppliers or sponsors.
Key Takeaways
The coronavirus has resulted in government directives that have forced the cancellation of events around Australia. These are unusual circumstances, and you need to understand your legal obligations to parties affected by the cancellation. These obligations will vary depending on the terms of any contracts you may have with those parties. If you have any concerns about any business obligations which have been impacted by the coronavirus, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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