As is often the case when a state or municipality enacts a
controversial law or policy, the enactment of Indiana's
Religious Freedom Restoration Act has sparked numerous calls for
organizations to pull meetings and other activities out of the
state as a form of protest. Many groups—like the Disciples of
Christ, as reported by the Washington Post—have
already decided to cancel their Indiana conventions as a result of
the new law.
While an organization may face significant membership pressure to
move a meeting out of a state where a boycott is underway,
executives need to be mindful of how such a pull-out will affect
the organization's finances. Association meetings entail
numerous contractual obligations—hotels, convention centers,
transportation, A/V, onsite registration services, and more. Each
such contract is a firm promise for the association to pay. For
most meeting contracts, a cancellation will almost certainly give
rise to damages payable by the association unless the contract
contains robust provisions allowing the organization to
terminate.
There are approaches to minimize the risk of damages at the outset,
however, when negotiating meeting contracts. If your organization
or its members have concerns about how local events could impact
your organization's meeting attendance based on legislation or
policies that your organization or its members oppose, it may be a
good idea to negotiate contract terms that address the potential
for a cancellation based on an "issues boycott."
Logically, such a provision might be included in the "force
majeure" section of your meeting agreements—making clear
that if legislation or policies are enacted that are contrary to
your organization's positions on certain key issues, a
cancellation without liability will be permitted. Of course, this
sort of provision may not be easy to negotiate; much will depend on
how much specificity you are able to place around the potential
cancellation. In other words, a hotel is more likely to assent to a
provision that is specific and detailed in its description of what
type of legislation would trigger the force majeure clause.
Further, as courts tend to view force majeure clauses narrowly, a
clear, specific definition will serve the association well in the
event of a court dispute.
An alternative approach would be to highlight in a separate clause
(outside of force majeure) t a statement that the association will
be relieved of its obligations under the contract if performance
would be contrary to your organization's mission.
There are numerous other considerations that come into
play—meeting cancellation insurance should be reviewed; a
standard contractual approach should be taken with all agreements
in connection with a particular meeting; also, when considering
whether to cancel, remember that doing so will likely have a
negative effect on an association's ability to negotiate
meetings agreements in the future, as such negotiations often hinge
on an organization's recent meetings history.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.