Legal consequences of concert cancellations for Covid-19

Regrettably, owing to the coronavirus, some musical events have had to be cancelled. What are the consequences of such cancellations for the artists and organisers concerned? Is the artist still entitled to the contractual fee? Text by Céline Troillet

Legal consequences of concert cancellations for Covid-19

Empty stages and concert halls: what is the legal situation regarding events cancelled because of Covid-19 restrictions? (Photo: Disq)

The coronavirus is a source of discomfort and uncertainty for us all. We must adapt as well as we can to these unprecedented circumstances since they are, for the time being at least, beyond our control. There are no clear answers to the health and economic issues that this crisis has raised, and there is great legal uncertainty. There are many outstanding questions.

Do you have a contract?

If you have a contract (or electronic exchange), see if it regulates the cancellation of the concert on grounds of force majeure or pandemic, and what effect such a cancellation has on fees. Albeit possible, this is seldom the case. Unfortunately, when a contract does provide for such cancellation, the parties usually agree that fees are not due in that event. Contracts rarely provide for a reduction in costs or the repayment of expenses already sustained.

A. Absence of a contract

If there is no written agreement, what legal provisions are applicable? To find out, you must proceed step by step:

1. Consider what type of contract under the Swiss Code of Obligations (CO) might be binding on you: Swiss law, unfortunately, does not prescribe how an artist’s engagement contract is to be legally classified, and there is no precedent or case law in this regard. Therefore, there are several possible interpretations. Moreover, each case must be considered individually and you should seek legal advice in this regard.

The possible types of contract used for artists are: the contract for works and services (Article 363 et seq. CO), the employment contract (Article 319 et seq. CO), or the agency contract (Article 394 et seq. CO). The conditions of the individual contract types, and the differences between them, are described in section B below.

2. Once it is established what type of contract you are bound by, check the following explanatory notes on the types of contract (also see section B) to what extent compensation might be possible.

3. If the contract does not match any of the contract types provided for in the Code of Obligations, reference must be made to a general provision of contract law dealing with the consequences of non-performance of an obligation., i.e. Article 119 CO.

⇒ Principle and conditions of Article 119 CO:

This article stipulates that if, after a contract is concluded, circumstances intervene which make it impossible for one of the parties to perform its obligations (for reasons not attributable to that party), then the party is no longer bound by its contractual obligations. The law considers “subsequent” impossibility (i.e. after the contract is concluded), which presupposes the realisation of the three following conditions:

• the obligor (the party liable for performance of an obligation) is no longer able to perform (objective impossibility);
• the impossibility must arise from circumstances after the conclusion of the contract. Chance occurrences (beyond the control of a party) are a good example;
• the impossibility is not attributable to the obligor (it is not his fault if performance is made impossible).

⇒ Objective impossibility not attributable to the obligor:

It is for the court to determine whether the obligation is impossible to perform for reasons not attributable to the obligor.

When public order or internal security is threatened, as in the case of a pandemic, the Federal Council, for Switzerland, is obligated under the Federal Constitution to issue ordinances and take emergency decisions (Article 185 of the Federal Constitution). Within the framework of its discretionary power, the court is required to take into account the rules and decisions issued by the federal authorities. It follows that, in the case of concert cancellations proceeding from official decisions, the existence of an objective impossibility not attributable to the obligor would probably be recognised.

⇒ Legal consequences for the parties:

An impossibility within the meaning of Article 119 CO releases the obligor (the party who has to perform an obligation) from its obligation as well as the creditor (the party for which the obligor is required to perform) (Article 119(2) CO).

In other words, when a contract is concluded (between an artist and a concert organiser), the parties (the artist and the organiser) are both released from their obligations (the artist is no longer required to perform on stage; the organiser is no longer required to pay the artist a fee) if, through no fault of the artist’s (i.e. because of Covid-19 and not for a reason attributable to the artist), the person who was supposed to act (the artist) is prevented from fulfilling his obligation (to perform on stage).

B. The individual types of contract under the Swiss Code of Obligations

The contract for works and services (Article 363 et seq. CO):

Generally, the performances of an artist or group of artists fall within the scope of the contract for works and services (the artist delivers a single performance, based on a pre-defined programme, which is equated with a work).

Here, the case of force majeure is governed by Article 378 CO. This article provides that, where completion of a work is rendered impossible by a chance occurrence affecting the principal, the contractor is entitled to payment for the work already done and to reimbursement of any expenses incurred that were not included in the price.

If a concert is formally cancelled for coronavirus-related reasons, the impossibility for the principal (the organiser of the concert) to perform the contract should be recognised insofar as the principal is unable to stage the artist’s concert through no fault of his own. As a result, Article 378 CO would apply, and the artist would be entitled to remuneration for any work already performed (e.g. rehearsals) and his expenses.

The employment contract (Article 319et seq. CO):

Under certain circumstances, the artist’s contract can be deemed an employment contract (a subordinate relationship between the artist and the organiser, where the artist’s obligation to play music is determined by the employer’s needs rather than by his own as an artist).

Article 324 CO regulates the employee’s salary if he is prevented from working. Whether or not this provision applies to cases of force majeure, i.e. the cancellation of a concert by reason of coronavirus-related measures, is disputed. Most would answer in the affirmative, which would mean that the artist would be entitled to continued pay.

Agency contract (Article 394 et seq. CO):

If the artist’s contract falls neither under the contract of works and services nor under the employment contract, it will generally be classified as an agency contract (the artist seen as an agent performing a service for the organiser).

The agency contract does not provide for cases of force majeure. As a result, if a concert is cancelled for coronavirus-related reasons, Article 119 CO would probably apply and, accordingly, no remuneration would be payable. A reservation should be made in the event of untimely cancellation (e.g. immediately before the scheduled performance). In that case, compensation (but not the fee) could be granted to the artist for the loss sustained (Article 404 CO).

C. Conclusion

It is important to address the possible cancellation of the concert and the consequences on your legal relationship in the artist’s contract. If these points are regulated and the circumstance occurs, the artist and the organiser know what they can expect and claim from each other and can thus avoid financial and other damages.

In absence of a written contract, or if the contract does not regulate this point, the situation is likely to be more difficult. Since the legal nature of the artist’s contract is not clear, the relationship between the organiser and the artist will have to be interpreted to determine which of the three contract categories it is subject to (contract for works and services, employment contract or agency contract). The legal consequences will vary depending on the applicable rules. Payment of the artist’s fee will be justified in some cases, and not in others.

As you can see, there is no clear-cut answer determining the legal consequences of concert cancellations due to coronavirus. The circumstances must be appraised case by case. In absence of a contract, the ideal solution would be for the parties to agree a compromise. A postponement of the service or the total or partial reimbursement of your expenses could be possible solutions.

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