Explaining Force Majeure Clauses in Athlete Endorsement Contracts

Welcome to part three of explaining athlete endorsement contracts. In weeks past, I covered both the exclusivity and usage rights clauses. Today, I am explaining a very relevant provision in today’s world: the force majeure clause.

The dictionary definition of force majeure is “unforeseeable circumstances that prevent someone from fulfilling a contract.” In practice, force majeure clauses essentially excuse a party of a contract from liability or completing obligations when something that is out of their reasonable control occurs.

Traditionally, force majeure clauses cover events such as wars, labor strikes, riots, crimes, and sudden legal changes. They also cover “acts of God” such as unpredictable weather like tornados, hurricanes, mudslides, floods, etc. The idea is that any event or occurrence that is beyond the reasonable control of a party will essentially excuse them if they fail to hold up their end of the contract as a result. They do not include things such as common weather patterns and predictable events. The more unforeseeable, the more likely it falls within a force majeure clause.

Force majeure clauses became a very hot topic around this time last year, as the COVID-19 pandemic caused widespread cancellations of sporting events, concerts, and all sorts of large events and gatherings. Millions of dollars hung on this one clause that is generally included at the end of a contract. Generally, one would assume that a global pandemic would qualify as a force majeure event. However, many attorneys post-COVID are not taking any chances and are expressly including the words “pandemic” and “epidemic” in these clauses.

Here’s an example of force majeure language before COVID:

A “Force Majeure Event” shall mean causes beyond the reasonable control of the parties including, without limitation, an act of nature, accident, fire, labor dispute, civil commotion, act of war, act or threat of terrorism, national day of mourning, delays in transportation, or embargos

Take a look at this example from 2021:

"Force Majeure" means an event or occurrence (e.g., a natural catastrophe, global pandemic, national pandemic, labor dispute or strike, act of God or public enemy, war, municipal ordinance, state or federal law, governmental order or regulation, or any other similar cause)

Notice the difference?

In athlete endorsement contracts, these clauses become very important when dealing with appearances, camps/clinics, autograph signings, and speaking engagements. If there is an event taking place or an appearance being paid for, it is in the athlete’s best interest to include a force majeure clause just in case something happens and they can’t appear. In that case, a proper force majeure clause would prevent the athlete from breaching the contract.

On the other side of the endorsement contracts, some brands and sponsors have been rightfully nervous when entering into live event contracts. For example, the rumors surrounding the postponement of the Olympics have made some brands weary. Brands are increasingly wanting to include legal language that would excuse their duty to pay an athlete if the Olympics were to be postponed in any way.

A majority of the time, force majeure clauses never come into play in athlete endorsement contracts. Typically, events and appearances go off without a problem and everyone walks away happy. However, in times of uncertainty it is very important to be aware of these clauses because as we learned in 2020, a lot of money can depend on them.