Rotella on Headline News Talking Coronavirus and 'Act of God' Terminating Contracts

Lynn: Thousands of travelers, you’re canceling your plans over fears of the coronavirus pandemic. Many people are even canceling their weddings. Some companies like Airbnb are trying to make it easier, they’re waiving penalty fees, but there’re other companies that are using that Act of God policy to dispute some contracts. So what kind of rights do you have in all of this? I want to bring in Bryan Rotella founder and managing partner of GenCo legal. Bryan, thanks for taking the time. I know personally, one of our producers who had to cancel her wedding just because of this, but these contracts, when you have a big venue, can they use that Act of God policy?

Bryan Rotella: Well, first of all, good morning, Lynn. And the answer is yes, they can use that Act of God policy. Your folks are going to learn some language that we typically don’t even have in first year law school. It is two words, force majeure, and then frustration of purpose. Now I’ll tell you, the force majeure language that Act of God language, have everyone out there has got a wedding or a big event, take their Mr. Magoo glasses out. Look at that closely because that language could actually help a bride or a groom postpone their wedding for 90 to 180 days, which could ultimately be very helpful.

Lynn: So you wouldn’t lose everything. I know with just a vacation that I had, I postponed it and still am able to use that money just toward a different date. Do you have any other rights as not only consumers but small businesses or vendors?

Bryan Rotella: Well, the small businesses, and I represent a lot of them, here’s the other issue … I said frustration of purpose. Well, every contract has a purpose line. Everything you get into with suppliers with even things like your IT that small businesses rely on, if right now you can’t use those things, there’s a concept in the law called frustration of purpose. But the pandemic, the virus has to be the frustration of purpose. What concerns me right now as a lawyer is we’re seeing some people, unfortunately, and you can imagine, taking advantage of this type of language to take advantage of businesses and also to take advantage of individuals. Anyone who sees that happening, contact your attorney general in your state. That is the agency that is going to be governing this. And I’m afraid they’re going to be seeing a lot of claims.

Lynn: Is there anything the federal government can do? Or any government, even a state level?

Bryan Rotella: Well, what the government just did, with really it’s the CDC, is saying that if you’re going to have 50 folks right now, we’re saying don’t do that for 80 days. So no gatherings for 80 days with 50 folks. That now puts your contract that you have into an area, forget force majeure, forget frustration of purpose. At that point, you can’t have that event. So the government has taken that step. One other thing that I’d like to stress though, Lynn, and I think it’s really, really important is for our folks out there that are having these events, forget the contract. If you put people’s lives in danger, there’s a concept called torts, ultimately if that person catches this coronavirus, COVID-19 because they went to an event that you had, the people going to spring break or whatever, you could be liable. So do the right thing ultimately for public health. As a lawyer’s advice, that’s going to be your best medicine right now.

Lynn: Some great advice. Bryan, thank you for taking the time to join us.

Bryan Rotella: My pleasure.