Events
A typhoon signal two days out, a venue that double-books, a budget pulled a fortnight before launch: events get cancelled, and the contract decides who pays for what was already spent. In the Philippines, the Civil Code fills in whatever the contract leaves out, and it gives the contract itself more weight than most people expect.
Who pays when something no one could control cancels the event?
By default, no one is liable for it. Article 1174 of the Civil Code says “no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.”
The same article lists the exceptions: “Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk”. The contract can move that risk, in either direction. If it says nothing, each side tends to absorb its own costs; our guide to event insurance covers what a policy can pick up.
How much does the contract decide?
Most of it. “Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.” The parties “may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.”
One limit matters for cancellation clauses: a contract “must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.” A clause that lets one side walk away whenever it likes, with no fee or notice, invites a challenge.
Can a cancellation fee be enforced?
Usually, as a penal clause. “In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary.” The fee replaces a fight over actual damages.
Courts can cut it, though. “The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor”, and even without performance, “the penalty may also be reduced by the courts if it is iniquitous or unconscionable.” A fee schedule that tracks real costs at each stage is the one that holds.
What if the other side just doesn’t deliver?
Then it’s a breach, not force majeure. Those “guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.” In a contract where both sides owe something, “The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case.”
What to write into an event contract
| Clause | Why it matters |
| A force majeure definition that names typhoon signals, government orders and venue closure | Article 1174 lets the contract declare which events excuse performance |
| A postponement option before cancellation | Keeps the work and the bookings already made, at a new date |
| A cancellation fee schedule tied to notice periods | A penal clause that tracks real costs is less likely to be reduced under Article 1229 |
| What is refundable, and what isn’t | Deposits paid to the venue, talent and suppliers are often non-refundable on their side |
| Who can cancel, how, and by when | Compliance can’t be left to the will of one party under Article 1308 |
The signal clause
Write the weather trigger in plain terms: which PAGASA signal, over which area, how many hours before the event, and who makes the call. Ambiguity here is what turns a typhoon into a dispute.
General information from Republic Act No. 386, the Civil Code of the Philippines. It is not legal advice; have counsel review any event contract before it is signed.
Who should write the terms?
Both sides, before the deposit moves. When you compare agencies, ask to see their cancellation and postponement terms; our guide to choosing a top events agency in the Philippines has the other questions. PUNX is an events agency in Makati: 50-plus people, founded 2023, running activations and events for GCash, Sun Life and PRU Life UK.
FAQ
Is a typhoon force majeure for an event in the Philippines?
Under Article 1174 of the Civil Code, no one is responsible for events that could not be foreseen or were inevitable, unless the law, the contract or the nature of the obligation says otherwise. Whether a typhoon excuses a party depends largely on what the contract says.
Are event cancellation fees enforceable?
A cancellation fee usually works as a penal clause, which replaces damages unless the contract says otherwise. Under Article 1229, courts can reduce it if the obligation was partly performed or if the penalty is iniquitous or unconscionable.
Can a client cancel an event contract at will?
A contract must bind both parties, and its validity or compliance cannot be left to the will of one of them under Article 1308. Cancellation terms should set notice periods and fees.
What if a supplier fails to deliver for an event?
Those guilty of fraud, negligence or delay are liable for damages, and in a reciprocal contract the injured party may choose between fulfillment and rescission, with damages in either case.
Related
Event insurance — what covers a typhoon cancellation
Event RFP template — what to send before you compare replies
Venue ocular inspection — what to check before you sign
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