Middle East War: A Force Majeure For Hospitality?

Hotel management agreements, like many commercial contracts, often contain clauses—commonly referred to as a “force majeure clause”—excusing the performance of the hotel operator and/or hotel owner if an event beyond its control makes performance practically impossible, impracticable, or difficult. Hospitality industry stakeholders were forced to confront these clauses during the COVID-19 pandemic, and the current conflict in the Middle East may require stakeholders to once again reexamine their rights and obligations under these provisions.

What Is a 'Force Majeure' Clause?

Courts largely permit sophisticated parties to allocate risk as they see fit. As a result, in the absence of a clause in a contract absolving a party of its obligation to perform, a party unable to fulfill its obligations due to an event outside its control faces a high bar to excuse its performance.