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.