If you paid to exhibit at, or sponsor a cancelled business show, where do you stand legally?
The Coronavirus pandemic has led to the cancellation or postponement of many, many events worldwide including business shows and expos. It is currently unknown exactly when such events will be able to resume safely. UK examples include; the Ideal Home Show, the BBC Good Food Show, the London and Edinburgh Book Fairs and more locally, the New Forest Show and Farnborough International Air Show.
I am seeing an uptick in client enquiries relating to this ongoing issue and am being told that many event organisers are refusing to give refunds.
Note that this blog is aimed at businesses who had paid to exhibit at or sponsor now cancelled business shows in the UK, rather than consumers.
Below we set out our advice on things to check regarding the cancelled show.
I would firstly advise checking the terms of the contract signed with the organiser of the cancelled business show. Pay particular attention to any force majeure, cancellation and termination clauses. Also worth noting are any provisions allowing the event organiser to unliterally vary the terms of the contract.
Does the contract specifically deal with the possibility of the show being cancelled or postponed and what the repercussions of this would be on each party’s liability to the other? If so, this is your starting point. If the event organiser has sought to limit or exclude its liability for breach of contract or cancellation of the show, then if you signed up to the exhibitor’s standard terms and conditions without further negotiation (as can be common) such limitation of liability clauses are only valid if they pass a test of ‘reasonableness’.
Does the contract contain a force majeure clause dealing with events (such as the pandemic) beyond the reasonable control of either party? If so, this may be of assistance and will depend on the precise wording of the clause. Please refer to my previous blog where I discuss in more detail the concept of force majeure and the common law principle of frustration, in circumstances where contractual obligations become ‘impossible’ to perform and what relief they can offer affected parties.
Broadly speaking, unless the terms of the contract provide otherwise and such terms are considered ‘reasonable’, then the exhibitor should be entitled to a refund from the event organiser. This is because the organiser will not be performing its side of the contract by putting on the business show and providing the benefits and networking opportunities the exhibitor signed up to. Seek legal advice if despite this, a refund is still not forthcoming.
Some event organisers are refusing refunds as they have only postponed rather than cancelled the business show in question until 2021 or have moved the event online to be held virtually. This can raise a number of concerns for the exhibitor – does the postponed date work for them? Will an online event still give them the same value for money?
Again, check the terms of the contract to see if it gives the event organiser any flexibility over the date and format of the show. If not, an exhibitor should be able to argue that the organiser is in breach of its obligations under the contract by not providing what was originally agreed and therefore the exhibitor should be entitled to a refund. If the event is moving online and you have for example, paid to host an exhibition stand at the cancelled business show, then you are arguably being deprived of the key benefit of the contract and again, should be entitled to a refund or at least a decent discount if you are happy to continue with participation in the online version of the event.
The fallout from the sheer number of cancelled business shows and other similar events is likely to have severe financial repercussions for all involved and for the business show and expo industry. Many of the businesses involved will be small ones, not able to afford to lose out. Whilst the pandemic is certainly not the fault of the event organisers, they will need to bear in mind the reputational risk if they are seen to be dragging their feet over the issue of refunds as they will be relying on exhibitors re-booking when the time is right. At the same time, if exhibitors are in a position to be flexible with the event organiser and put the money paid towards a future event or accept a discount for participation in a virtual business show then this will all help the industry to survive and recover. Going forward, I cannot underestimate the importance of clear contract terms which deal with the eventuality of such events or shows having to be cancelled, given that we could be living under the threat of further waves of COVID-19 for some time to come.
If you would like further information regarding where you stand in relation to a cancelled business show please contact Emily Sadler.
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