Things are changing rapidly.
Public life in America is slowly grinding to a halt. All major sports events are shut down, schools are closing, public gatherings and events are getting cancelled, travel is becoming more and more restrictive, and our normal way of life is going to change here for the next few weeks.
First off, I want to give my heartfelt thoughts to everyone out there affected by this. If you’ve gotten the virus or have close family or friends who have been infected with the virus, my heart goes out to you. If you are in the event industry, it’s clearly hitting us super hard. If you’re a small business owner, it’s hitting you super hard. And, yes, even if you are in the corporate world it’s hitting you hard too because employees’ livelihood is on the line if the economy continues to decline this way. Conferences and events are getting cancelled or postponed which is losing venues, performers, and organizers, etc., tens of hundreds of thousands of dollars. AND in the event industry, we have clients non-stop wanting to cancel or rescheduling their wedding/elopement/gatherings.
This week has been hard. It’s been stressful. People are living in fear and panic. It is not a fun time and people feel paralyzed.
We here at The Legal Paige have been on tap all week fielding questions, jumping on webinars, jumping on lives in groups, answering DMs and emails non-stop, and we want to be SURE you have access to legal information at this time. It’s never been a more critical time for lawyers to do what we set out to do when we went to law school: help people.
So, I’m here to help. But I want to start with things you CAN CONTROL! Which are your reactions to this issue as a business owner. Be prepared and anticipate, don’t simply react to this situation when things arise. Don’t wait around wondering what your clients are thinking. Airlines, Disney, museums, arenas, sports teams, and literally every business I am subscribed to has been sending out notices to the public and their clients about the precautions they are taking regarding Coronavirus.
In order for YOU to act similarly as a business owner, I’m here to help with three steps I want to make sure you all know in addressing this situation.
First, READ YOUR CONTRACT. YOUR CONTRACT.
What do these clauses mean to you in plain English? Because that is how a judge is going to interpret them, and now is the time to fully understand WHAT they say and how you can explain them to your clients. Know your rescheduling and cancellation policies. Know what to do with your retainers if your clients do cancel, and try to still perform your services if that is at all possible by entering into a rescheduling agreement.
What does your Force Majeure clause state? Are there procedures in place regarding what happens to your retainer/deposit in a Force Majeure situation? If so, follow that. If not, you’re likely looking to an alternate solution such as keeping the retainer on credit and being able to transfer it to future services with your clients.
Second, Perform Your Services if You CAN
Right now in the current state of the world, it literally has to be IMPOSSIBLE for you to perform to make it a “Force Majeure” situation. Some people are quarantined, which would obviously mean that it would be impossible to perform. But, some service providers can get to the location they are supposed to be at and are willing and able to do so. If you do decide to perform your services over the few weeks, please be safe and protect yourself. Email your clients and let them know what precautionary measures you will be taking and the type of things you’ll do to protect yourself (gloves/masks/washing hands/hand sanitizer, etc).
If your clients decide to cancel and you can still perform your services, you are not in a Force Majeure situation. Thus, you should try to keep your retainers/deposits if at all possible. It’s called a “non-refundable retainer” for a reason. Remember, you can always be nicer as the business owner, but the fact of the matter is the livelihood of your business is at stake and that retainer/deposit is in place for a reason.
Now, if YOU want to cancel your services for any reason (such as you are immunocompromised or you don’t want to risk getting sick), you can absolutely do that. But you will need to likely refund the entire amount of any money paid because you didn’t perform your services as stated under your contract. Caveat here is that you MAY be able to keep what services you have rendered up to that point of cancellation, but generally it’s not wise to do so since YOU are the one cancelling. (E.g. Wedding planners and similar providers are front-heavy on their services so this would apply to you.)
Third, Document EVERYTHING.
Literally everything (and email documentation is fine). In case something happens later, after all the panic has died down, you will want to be able to show EXACTLY how you handled the situation and have proof that it went down the way it did. This also means that its best legal practice to be proactive and send out notices to your clients about your policies and procedures with the Coronavirus impacts. That ensures that when you look back at the documentation, you were the first one in the string of communications to begin the discussion. Also, it’s really important to document your finances losses and all client communication if you want to access any relief funds from the Small Business Association or other means. It’s guaranteed that you will need to have proof of your financial hardship.
In Conclusion, Determine the Best Course of Action for YOU and YOUR Business
Ultimately, be kind and understanding with your clients. This is a horrible time for them too. I would be devastated if I had to cancel or reschedule my wedding or another event that I had spent so much time, energy, and money planning. Your clients are likely navigating their contracts around 10-15 other vendors right now, and are having to make some incredibly difficult choices.
Also be sure to educate yourself before making any big decisions. Be mindful of the news you’re listening to, watching, or reading. Use trusted sources like the World Health Organization (WHO), The Center for Disease Control (CDC), and trusted new networks like the BBC.
Finally, be mindful of your heart and your own ethics, morals, and integrity. If you’re stressed out and scared, that’s okay. There is no right or wrong way to feel during this time. But take time away from your screens and reset if necessary, and reach out for help if you need. Also, if YOU feel like you need to refund a retainer or transfer the retainer to another date because that is what feels right to you, that is fine. You are the CEO of your business. Not others. Weigh the legal and ethical/integrity factors and determine the best course of action for YOU and YOUR business.
I’m offering complimentary 15 minute legal consultations all weekend and next week, reach out if you need it and let’s get all those questions answered so you can relax and get you and your business through this time. You can email us at firstname.lastname@example.org .
You can also join our community on Facebook HERE where I am going Live often, answering questions, and ensuring that we have a community around us to support one another during this critical time. https://www.facebook.com/groups/602195700208827/
And, if you are in a cancellation or rescheduling situation with your clients, PLEASE make sure to get a legitimate and comprehensive cancellation contract or rescheduling contract in place. We have updated ours here at The Legal Paige this week and have discounted the contracts tremendously so you have easy access to them and can readily use them in your business right now. Just go to: https://thelegalpaige.com/cancellation-and-rescheduling-template-contracts to purchase today.