COVID-19 and Contractual Ramifications: How Force Majeure Impacts Struggling Sporting Associations Like the NBA in Light of COVID-19 Mandated Closures and Postponements
Contracts, 2015 @ Government of Alberta on Flickr: https://flic.kr/p/BVqjsr
By Jessica Laske*
Recent COVID-19 Headlines and Sports
The majority of recent news headlines almost exclusively concern the novel Coronavirus (COVID-19). Recently, the World Health Organization (WHO) officially declared COVID-19 a pandemic. In recent memory, H1N1 or the “swine flu” was the last pandemic declared in 2009 by the WHO. Currently, Pennsylvania has over 18,000 confirmed cases of COVID-19. The US Center for Disease Control (CDC) recommended a list of measures to protect American citizens from spreading the disease, introducing the term “social distancing” into common parlance. In early March, the National Basketball Association (NBA) decided to impose a temporary hiatus to protect players and the public. Other sports have implemented measures because of COVID-19 such as the National Hockey League (NHL) postponing the NHL draft and officials postponing the Indianapolis 500 until August. Organization executives, players, and others express concern over the economic impact of COVID-19.
Executives, owners, players’ union, and coaches face questions on issues like player compensation, individual medical privacy, and economic impact on part-time employees. Recently, the National Basketball Players Association (NBPA) informed players of a “doomsday provision” in the League’s Collective Bargaining Agreement (CBA). The provision would allow owners to withhold player compensation if the NBA decides to cancel the rest of the basketball season due to COVID-19. Entitled the “force majeure event clause,” the CBA provision outlines dramatic circumstances that would lead the NBA to cancel the rest its season.
What Is Force Majeure And How Does It Impact The NBA?
A force majeure provision in a contract (like a CBA) relates to “impossibility of performance due to an act of God.” In French, force majeure literally translates to “superior force.” To trigger the provision, the enforcing party has to follow other contract terms like giving the other party advance notice and the contract usually defines the “act of God” events. Triggering events or “acts of God” could include war, terrorism, disaster, or other emergencies outside a party’s control. Organizations or individuals claiming force majeure must prove that the triggering event was beyond their control and they did not cause the event or circumstance. Simple economic hardship or events that parties could have prevented will not trigger a force majeure contract provision.
Under its Collective Bargaining Agreement (CBA), the NBA defines a force majeure event as events or conditions that “makes it impossible for the NBA to perform its obligations…or frustrates the underlying purpose of [the] Agreement…[.]” The CBA lists events or circumstances such as wars, sabotage, terrorism, natural disasters, and even epidemics. Under Article XXXIX, section 5 players could lose “1/92.6 of their salary” for every cancelled game due to a force majeure event. According to Entertainment and Sports Programming Network (ESPN), “there’s been no discussion among the league and NBPA [National Basketball Players Association] about triggering [the force majeure] provision.” Currently, hope remains that the hiatus will not last long enough to trigger that provision. As it stands, the NBA can expect a minimum 30-day hiatus.
The legal community has also discussed the potential relief to businesses or other institutions under “boilerplate” force majeure provisions. According to one article, significant industry disruptions such as the “cancellation/postponements of…events like South by Southwest” and March Madness resulted in companies unable to meet contractual obligations. Force majeure clauses vary depending on individual contracts and serve only as a temporary measure. Another legal source notes that force majeure clauses can excuse performance “in part” or contain “catch-all” provisions that cover any event that prevents a contract’s performance. Depending on different Collective Bargaining Agreements, athletes who face play time postponements or cancellations could lose payment or other benefits. However, anyone impacted in such circumstances must adhere to the individual force majeure provision in their contracts.
What Is Ahead?
As of April 8, 2020, the United States has close to 400,000 recognized cases and almost 13,000 COVID-19 deaths. States hit hardest include Washington, California, New York, Florida, New Jersey, and Pennsylvania, Connecticut, Massachusetts, Maryland, Georgia, Louisiana, Texas, Michigan, Indiana, Illinois, and Colorado. As of April 8, 2020, the WHO reports nearly 1.5 million confirmed cases worldwide. The situation is an unfolding crisis that many people speculate will or will not end on a particular date or month. The NBA is only one of many organizations that may have trouble fulfilling contractual obligations to their players or employees. In fact, basketball player Kevin Durant and football coach Sean Payton tested positive for COVID-19. As the situation continues to develop, impacted organizations, sporting bodies, and individuals will need to wait and see just how extensive the impact may be domestically and internationally. Only time will tell whether force majeure provisions will apply.
*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2021, Villanova University Charles Widger School of La
 See Rolling Updates on Coronavirus Disease (COVID-19), World Health Organization, https://www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen (last visited Apr. 4, 2020) (detailing the COVID-19 news around the world as it happens).
 See Bill Chappell, Coronavirus: COVID-19 Is Now Officially A Pandemic, WHO Says, NPR (Mar. 11, 2020), https://www.npr.org/sections/goatsandsoda/2020/03/11/814474930/coronavirus-covid-19-is-now-officially-a-pandemic-who-says (reporting that World Health Organization declares COVID-19 a pandemic).
 See id. (noting the last pandemic declared in 2009 was H1N1 or swine flu).
 See Coronavirus (COVID-19) Pennsylvania Overview, Pa. Dep’t of Health, https://www.health.pa.gov/topics/disease/coronavirus/Pages/Coronavirus.aspx (last visited Apr. 8, 2020) (delineating Pennsylvania’s cases and statistics on COVID-19).
 See COVID-19 Cases in the U.S., Ctr. For Disease Control & Prevention, https://www.cdc.gov/coronavirus/2019-nCoV/index.html (last visited Apr. 8, 2020) (detailing the CDC’s tactics and statistics on COVID-19 in the United States).
 See Ramona Shelburne, Inside The NBA Coronavirus Shutdown: How a Few Tense Hours Changed Everything, ESPN (Mar. 13, 2020), https://www.espn.com/nba/story/_/id/28897195/inside-nba-coronavirus-shutdown-how-tense-hours-changed-everything (reporting on the NBA’s decision to suspend play in light of COVID-19 outbreak).
 See Joseph Zucker, Timeline of Coronavirus’ Impact on Sports, Bleacher Report (Mar. 26, 2020), https://bleacherreport.com/articles/2880569-timeline-of-coronavirus-impact-on-sports (reporting on COVID-19’s impact on American sports); see also Jenna Fryer, Indianapolis 500 Postponed Until August Because of COVID-19, U.S. News (Mar. 26, 2020), https://www.usnews.com/news/sports/articles/2020-03-26/indianapolis-500-postponed-until-august-because-of-covid-19 (announcing Indianapolis 500 race’s suspension).
 See Shelburne, supra note 6 (noting executive’s and others’ concerns regarding the hiatus’ economic impact).
 See id. (discussing economic concerns following NBA hiatus).
 Adrian Wojnarowski, NBA Players' Union Details Doomsday Pay Provision in Memo to Players, ESPN (Mar. 13, 2020), https://www.espn.com/nba/story/_/id/28897933/nba-players-union-details-doomsday-pay-provision-memo-players (describing the CBA provision that could prevent players from receiving part of their salaries)
 See id. (discussing the CBA provision that may arise if COVID-19 forces the NBA to cancel rest of the season).
 Id. (reporting on the CBA’s force majeure provision triggered by events such as war or epidemic).
 1 Am. Jur. 2d Act of God § 13 (2020) (defining force majeure provisions).
 See Force Majeure, Merriam-Webster, https://www.merriam-webster.com/dictionary/force%20majeure (last visited Apr. 9, 2020) (translating force majeure into superior force).
 See 1 Am. Jur. 2d Act of God § 13 (2020) (discussing the application and triggering of force majeure provisions).
 See Williston on Contracts § 77:31 (4th ed. 2019) (providing sample force majeure language and provisions).
 See id. (explaining the application of force majeure provisions in contracts).
 See Rexing Quality Eggs v. Rembrandt Enter., Inc., 360 F. Supp 3d 817, 842 (S.D. Ind. 2018) (“…parties are free to contract to allow for excusal where economic circumstances dictate [but they did not do so here].”); see also Great Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn., LLC, 871 F. Supp. 2d 843, 854 (D. Minn. 2012) (“However, a force majeure clause may not be invoked to excuse performance where the delaying condition was caused by the party invoking it or could have been prevented by the exercise of prudence, diligence, and care.”) (citing Erickson v. Dart Oil & Gas Corp., 474 N.W.2d 150, 155 (Mich. Ct. App. 1991)).
 2017 NBA-NBPA Collective Bargaining Agreement, National Basketball Players’ Ass’n (July 1, 2017), https://cosmic-s3.imgix.net/3c7a0a50-8e11-11e9-875d-3d44e94ae33f-2017-NBA-NBPA-Collective-Bargaining-Agreement.pdf (defining and outlining the terms of the force majeure provision in NBA’s CBA).
 Id. (outlining the details of the force majeure provision)
 Wojnarowski, supra note 10 (claiming that no discussion over the triggering of the force majeure event has taken place).
 See id. (reporting on possibility of force majeure provision).
 See Ohm Youngmisuk, Adam Silver Says NBA Hiatus Likely to Last 'At Least' 30 Days, ESPN (Mar. 12, 2020), https://www.espn.com/nba/story/_/id/28893331/nba-owners-seeking-30-day-reevaluation-suspension-games (announcing that NBA hiatus will last for “at least” 30 days).
 See P. Daniel Cortez & Jason B. Sims, Boilerplate Contract Language Coming to the Forefront: Force Majeure Clauses and COVID-19, Nat’l L. Rev. (Mar. 19, 2020), https://www.natlawreview.com/article/boilerplate-contract-language-coming-to-forefront-force-majeure-clauses-and-covid-19 (discussing the substance and implementation of force majeure provisions)
 See id. (noting major event cancellations and postponements because of COVID-19).
 See id. (observing that force majeure clauses vary by individual contract and only apply “for the period of time the force majeure event restrains a party’s performance under the contract.”).
 See Maria Lenhart, Does Your Force Majeure Clause Cover the Coronavirus? MPI (Feb. 26, 2020), https://www.mpi.org/blog/article/does-your-force-majeure-clause-cover-the-coronavirus (discussing the impact of COVID-19 on force majeure contractual provisions).
 See Wojnarowski, supra note 10 (discussing the CBA provision that may arise if COVID-19 forces the NBA to cancel the rest of the season).
 See Lenhart, supra note 27 (noting the differences between separate force majeure provisions).
 See States Reporting Cases of COVID-19 to CDC, Ctr. Disease Control & Prevention, https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html (last visited Apr. 8, 2020) (reporting on American COVID-19 statistics).
 See id. (reporting on American COVID-19 case numbers).
 See Coronavirus Disease (COVID-19) Pandemic, World Health Org., https://www.who.int/emergencies/diseases/novel-coronavirus-2019 (last visited Apr. 8, 2020) (reporting global COVID-19 statistics).
 See id. (reporting ongoing numbers and information on COVID-19).
 See Wojnarowski, supra note 10 (discussing the CBA provision that may arise if COVID-19 forces the NBA to cancel the rest of its season).
 See Gabriel Fernandez, Coronavirus: Kevin Durant, Sean Payton Among Athletes and Coaches Who Have Been Infected with COVID-19, CBS Sports (Mar. 23, 2020), https://www.cbssports.com/general/news/coronavirus-kevin-durant-among-athletes-and-coaches-who-have-been-infected-with-covid-19/ (reporting on athletes and coaches currently suffering from COVID-19).
 See Coronavirus Disease (COVID-19) Pandemic, supra note 32 (stating the developing COVID-19 news and information).