One of my earliest posts on ArtsHacker encouraged people to feel comfortable with altering and amending contracts. Every organization operates in a different environment and has varying levels of risk tolerance that will determine what changes they might make to a contract.
Always Revise In This Scenario
One contract scenario I would urge people to never leave unamended is where the service provider can cancel with minimal cost but where you as the contractor have to pay in full, plus some extra, regardless of the reason for cancellation. The examples I am going to use are in the context of an artist and a organization contracting a performance, but the basic concepts apply to all disciplines and contracts for services and with the roles reversed.
ARTIST’S CANCELLATION: Purchaser agrees that Artist may cancel Artist’s engagement hereunder without liability by giving the Purchaser notice thereof at least thirty (30) days prior to the commencement date of the engagement hereunder. Upon termination of this agreement in accordance with this paragraph, Artist shall return to Purchaser any deposit previously received by Artist in connection with the engagement. Subject to the foregoing, upon such termination, the parties shall have no further rights or obligations hereunder, and each of the parties shall bear its own costs incurred in connection with this agreement.
FORCE MAJEURE: If, as the result of a Force Majeure Event Artist is unable to, or is prevented from, performing the engagement or any portion thereof, Artist’s obligations hereunder will be fully excused, there shall be no claims of any kind for damages or expenses of any kind by Purchaser, and Purchaser shall bear its own costs and expenses in connection with this Agreement. Notwithstanding the foregoing: (i) Purchaser shall be obligated and liable to Artist for such proportionate amount of the payments provided for herein as may be due hereunder for any performance(s) which Artist may have rendered up to the time of the inability to perform by reason of such Force Majeure Event; and (ii) in the event of such non-performance as a result of a Force Majeure Event, if Artist is ready, willing and able to perform (but for the occurrence of such Force Majeure Event), Purchaser shall nevertheless pay Artist an amount equal to the full Guarantee plus all other payments and compensation due hereunder. For clarification, in the event of cancellation due to any Force Majeure Event, and whether or not Artist is ready, willing and able to perform, Purchaser shall remain responsible for all transportation, accommodations, expense reimbursements and any other payments or compensation due Artist and Artist’s crew and entourage pursuant to the terms of this Agreement.
There is a lot there to read, but basically in the first paragraph, the artist can cancel within 30 days and just return the deposit the purchaser paid without owing anything else.
In the force majeure paragraph, if the artist can’t perform due to some force majeure event like weather, civil conflict, strike, earthquake, Acts of God etc, they are excused from their obligations. (blue text) However, if the artist arrives and the performance is prevented by the same force majeure events, you need to pay them in full, plus expenses for things like transportation, accommodations, food, even if the artist isn’t ready and willing to perform. (red text)
So essentially, if a snow storm prevents the artist from getting to you, they are excused. If they arrive and then the same storm causes the governor to declare a disaster and shut down all the roads, if you haven’t altered the contract you technically need to pay the artist even if they are stuck at the hotel, sick in bed with the flu and couldn’t perform without vomiting every 20 minutes.
In fact, I am not sure that per the conditions after “For Clarification…,” it couldn’t be read that if you cancel due to weather before they call and say they can’t get there due to weather, you owe them.
Seek An Equitable Arrangement
While I make this language out to unfairly favor the artist, and it does, it must be acknowledged that if the artist is standing on your doorstep, they have gone to a lot of expenses to prepare the show and transport it to you. You don’t want to strike everything and close the door on some fair degree of compensation.
By the same token, if the artist cancels a month out from the performance, you have probably gone to some expense to promote show. A cancellation will mean staff hours processing refunds and possibly a loss of good will for your organization in the community. Perhaps some allowance should be made for your expenses as well.
If a force majeure event should occur, your organization most likely is not in a place to both pay the artist in full and refund tickets.
As you are composing proposed alternative language for the contract, you should consider what a fair resolution for all parties would look like. Should both parties make a good faith effort to reschedule? Should the artist reimburse you for your promotional expenses if they cancel? What expenses should you reimburse them for? Under what conditions and time of notice? How are those things to be determined?
It is impossible to anticipate all the things that might happen in order to include them in a contract so the best language to use might include some variation of the phrase “will mutually determine…” For example, “Artist and Purchaser shall mutually determine and document in writing their agreement that conditions shall render the performance impossible, hazardous or unsafe.”
That will cover both snow storms and a crane sending a five ton air chiller careening into your lobby instead of placing it on the adjacent building’s roof.
Organizations for whom I have worked have developed their own standard language in response to different requests. It is best to consult your lawyer to determine what language best serves your needs. Some of it certainly should not allow for the flexibility of mutual determination.
Opportunity or Opportunistic?
Another related clause you might come across goes something like this:
The Artist has the right to cancel this engagement upon written notice to the Purchaser at least 30 days prior to the date of commencement of the engagement if the Artist enters into a contract prior to such 30 day period for the services of the Artist in film, radio, television, concert or theatrical production.
This can be great for you if rescheduling them means you can get them for the same price but the exposure on television or in a movie will raise their profile and subsequent demand to the extent you can charge more and quickly sell out the new dates.
On the other hand, it can be bad for you if they are just cancelling because a casino is offering them more. Again, another place you may want to stipulate cancellation and rescheduling by mutual agreement.
Ultimately, when it comes to negotiating language or asserting your rights when something goes awry, you want to consult with your lawyer about how aggressively you want to pursue a course of action. The one bit of leverage both sides have over each other is that few people want to get a reputation as being hard to deal with because it negatively impacts future opportunities. Of course, there are some artists and organizations whose prestige is such that they don’t care about a bad rep.