Force Majeure Clauses Taking Center Stage in Uncertain Times

In an article published in ALM’s September 2023 Entertainment and Sports Law Newsletter and republished by the Daily Report on September 13, 2023, Michelle Davis, AGG Corporate & Finance and Technology associate and Entertainment & Sports team member, discussed the re-emergence of force majeure clauses as a key consideration for the entertainment industry amid the Hollywood strikes. The contractual provision is key when protecting a company from liability in extenuating circumstances. As struggling studios seek a lifeline out of debt amid the strikes, Michelle highlighted the nuances of drafting an effective force majeure provision.

“If there’s a concern that force majeure may need to be invoked, think twice before limiting the definition to a closed, enumerated list of events (e.g., ‘force majeure means natural disasters, war, pandemic or labor dispute’),” Michelle advised. “Instead, keep the list open for broader interpretation (e.g., ‘force majeure events include but are not limited to natural disasters, war, pandemic, labor dispute and any other event reasonably unforeseen by the party’).”

It is important to understand what is covered under a force majeure clause and to provide other obligations to a contract that go beyond the confines of force majeure if necessary. Michelle further clarified the importance of timing and notice period formalities regarding force majeure.

To read the original article in ALM’s Entertainment and Sports Law Newsletter, please click here (subscription required).

To read the article in the Daily Report, please click here (subscription required).