Hotel Management Agreement Litigation in the Covid-19 World
By Steven D. Weber Managing Partner, Stark Weber PLLC | December 12, 2021
How will COVID-19 (coronavirus) impact the drafting and enforcement of force majeure provisions in hotel management agreements? No one can say with certainty.
However, at least four recent cases decided during the past year and a half, between July 2020, and March 2021, may provide hospitality actors with guidance on drafting force majeure provisions and on deciding whether to exercise or litigate such provisions.
A hotel management agreement may be a contract between a hotel owner and a hotel operator or hotel manager. That hotel management agreement may set forth the owner's and operator's or manager's relationship. A force majeure provision is a provision that is sometimes included in a hotel management agreement or other contract. In some cases, the basic premise of a force majeure provision is that the occurrence of certain events or conditions may excuse performance, in whole or in part, of a contract. A force majeure provision may appear in a contract as a stand-alone provision or with other terms.
Black's Law Dictionary defines the term "force majeure" as follows:
Force majeure (fors ma-zh?r) [Law French "a superior force"] (1883) An event or effect that can be neither anticipated nor controlled; esp., an unexpected event that prevents someone from doing or completing something that he or she had agreed or officially planned to do. • The term includes both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots, strikes, and wars). - Also termed force majesture; vis major; superior force. Cf. act of god; vis major (1).
FORCE MAJEURE, Black's Law Dictionary (11th ed. 2019). However, what constitutes a force majeure may be open to dispute. As set forth above, Black's Law Dictionary's definition of force majeure identifies certain acts of nature (floods and hurricanes) and acts of people (riots, strikes, and wars) as events that are neither anticipated nor controlled or that are an unexpected event that prevents someone from doing or completing something that he or she had agreed or officially planned to do.