All contracts in sports, from player contracts to suite contracts, typically include a force majeure clause to deal with what happens when either side says it is unable to fulfill the requirements laid out in an agreement. On the most recent episode of “SBJ Unpacks -- Weathering COVID-19,” our Bill King is joined by Greg Levy, Associate Dean of the Univ. of Miami Law School and Peter Carfagna, co-Dir of the Sports Law Track at UM. They discuss force majeure in the time of COVID-19, a summer college course they created to teach it and liability as sports leagues reopen.
On how force majeure clauses work:
Carfagna: It's a boilerplate clause that nobody paid all that much attention to (before COVID-19). … In lay person terms, must I perform? If I can’t perform, supervening causes like pandemics or governmental orders that prevent me from performing my otherwise contracted obligations excuse me from performing. ... The standard clause would say, 'Acts of God, unforeseeable events that prevent and excuse me from performing also excuse me from paying until we can make good on the other side of this and figure out what's fair on both sides.'
On why they created a summer course on force majeure and the course's overall structure:
Levy: We saw many of our students losing opportunities this summer. We took on that role of how do we give them something valuable, something they can actually use and in some sense simulate some of the externship/internship experience, which is why this class is so hands on and practice oriented. … It was intentional for us to keep the course somewhat small, so we have about 24 students that are participating in the course this summer.
On how teams, leagues and players should approach liability if a player gets sick when sports reopen:
Carfagna: The return to play for the players has to be made as safe as possible. You have to have very meaningful waivers of liability. The owners have to have the equivalent of a pandemic waiver if and when players choose to return to professional play. I would extrapolate from there to say the same thing applies to collegiate sports. If the SEC returns to practice on June 8th and I’m the athletic director or the general counsel for an SEC school, I’m having a big time waiver signed for each and every one of those players who comes back to start training on June the 8th.
On how teams will protect themselves from liability with insurers likely carving out protection from COVID-19 related lawsuits:
Carfagna: You hope your comprehensive general liability will protect you, but that’s going to get down to each clause and each policy as you reopen your facility. Does your comprehensive general liability protect you against this sort of thing? That’s where we get into the denials, exclusions and big fights. The insurers’ market is not going to reopen as the venues do. It’s going to be prohibitively expensive to get policies going forward. Then, do you feel lucky today as an owner?
