Media & Entertainment Law

Force Majeure clauses - ABC terminates overall deals as result of lengthy WGA strike

By Gordon Firemark

Last week, Variety reported that ABC has invoked the Force Majeure clauses in nearly  two dozen writer’s overall deals,  terminating those contracts on grounds that the WGA strike (now in its 3rd month).

This gives rise to a discussion of what is and is-not a ‘force majeure’ event.  Typically, we think of ‘force majeure’ as the proverbial “act of god”, an earthqueake, flood, storm, or other natural disaster that halts or impairs the continued operation of the entertainment industry.  But, for the past 20 years or so, force majeure clauses have also been written to include War, civil unrest, and labor disputes (read, “strike”)

Under most f of these clauses, when there’s  an event of force majeure,  the operation of the contract in question is suspended for the duration of the event in question.  Many contracts, however, also include language providing that if the force majeure event continues for a specified period (often as short  as 8 weeks), one or either party may terminate the contract altogether.  That is what’s happening with ABC, and is likely to occur at other networks and studios before long.

Now, of course, if a company has a good thing going with a particular writer, it’s not likely to terminate a deal under the force majeure clause, so this round of terminations will likely only effect those writers with overall deals, but who do not currently have shows on the network schedules.

So, is this opportunity knocking?  Once the strike ends (will it ever?), will terminated writers use their newfound freedom to find better, more favorable deals with other studios or networks, or will they be tarred with the brush of having been ‘released’?

Full post as published by Entertainment Law Update on January 25, 2008 (boomark / email).