What to do when COVID-19 threatens your organization’s planned event(s) in Belgium?

4 May 2020

Lockdown

The COVID-19 pandemic has caused many large and smaller events worldwide to be cancelled or postponed. This is not different in Belgium, where for example all summer festivals were cancelled for obvious reasons.

The Belgian Government has imposed stringent lockdown measures, which consist among others in prohibiting gatherings, private or public activities of cultural, festive, social, sportive and recreational nature and non-essential travel. A phased lockdown exit strategy has seen the light, but it remains very likely that ‘mass events’ will remain prohibited until at least the end of the summer.

The spread and control of the virus, as well as lockdown measures, re-evaluated from time to time. This leaves room for uncertainty.

Your organization might have planned an event during in Belgium during these lockdown measures, such as a seminar, a conference, an annual meeting, a party, etc.

What happens to B2B contracts which are due to be performed during or right after these (extendable) lockdown measures?

Be careful with concessions in (email) correspondence

Most likely, you will be inclined to discuss possible scenarios with your business partners. However, be careful what you put in writing (this includes emails!). Well-meant concessions made in times of solidarity could possibly result in the admission of obligations which your organization should not have undertaken.  A concession or agreement made by email could very well hold up in court, possibly even as an amendment of your original written agreement.

Force majeure: not always the answer…

A common misconception in this regard is that force majeure will save you.

Under Belgian law, force majeure is considered an insurmountable obstacle to the fulfillment of an obligation. It should concern an unforeseeable circumstance, beyond the control of the debtor which renders the fulfillment of the obligation completely impossible[1].

The COVID-19 pandemic and, more specifically, obligatory lockdown measures imposed by the Government might constitute force majeure, provided that the obligation is rendered completely impossible.

Important to remember is that the nature of force majeure is an exception, which can be invoked by the debtor whose obligation is rendered impossible. It cannot be automatically invoked by any party to the contract. For instance, if your obligation consists of payment, force majeure in general cannot be invoked. Belgian case law indeed dictates that your ability to pay is generally not affected by an ‘act of God’.

On the other hand, if your business partner (the debtor) invokes the force majeure exception, the natural result would be that you (the counterparty) should not fulfill your obligation, which means that payment (at least in part) could be withheld.

In any event, much will depend on the wording of your contract. The parties are indeed free to agree on a definition and the results of force majeure in a contract. In doing so, they can also allocate the risks of force majeure (in full) to one or more parties. Therefore, an assessment of your contract will be key.

If the contract remains silent and the debtor does not invoke force majeure, other options might possibly be considered, such as dissolution of the contract for loss of its object or abuse of right. It goes without saying that each situation can be different and should be assessed on its own.

What happens with ticket holders?

If an organization would be forced to postpone its event, ticket holders /participants might want to claim a refund or cancel the contract. In order to limit the financial consequences of mass refunds for event organizers, it is to be noted that the Belgian Government has temporarily allowed event organizers, under certain circumstances, to replace the refund right with a voucher for an event with the same essential characteristics which will be held within two years.

Need help?

If you would like to know more or require help in determining your organization’s legal options with regard to inter alia events cancellations and related bookings, please contact Hannes Abraham or Patrice Vanderbeeken.

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[1] Belgian case-law adopts a more subjective approach. This means that it would be sufficient for the force majeure event to be reasonably insurmountable in view of the specific circumstances of the case. However personal characteristics of the debtor (strengths and weaknesses) cannot be taken into account. The force majeure event should be analysed in abstracto, with as reference the bonus pater familias.