Ask the Attorney: Challenges for Independent Planners

Northstar Meetings Group's Independent Planner Education Conference, known as IPEC, was held this year at the Gila River Resort and Casinos – Wild Horse Pass in Chandler, Ariz., and featured a lively Ask the Attorney session with Emily Hardin, associate general counsel for Maritz. Following are some of the issues she addressed. 

What are the challenges faced by independent planners? 

Independent planners don’t have a corporate safety net to rely on. That means everything from liability management to benefits, contracts and operations falls on the planner. An independent planner can be a one-person shop responsible for everything, from finance and human resources to legal issues, operations and information security.

How does business structure impact independent planners?

Without taking steps to formalize a business structure, an independent planner could be opening herself up to risk. The most basic form of a company is a sole proprietorship, which is what a business probably is unless the owner takes steps to create a different type structure. Note that a sole proprietorship could lead to personal liability.

Depending on the circumstances, an independent planner might look at other formal business structures that could protect them  better as individuals and work well for their company. Limited liability companies (LLCs) and corporations can offer liability protection and tax flexibility if set up correctly. 

Contracts can be so long and confusing. What does every contract need to address?

There are many different types of contracts. Typically, they address two things: establishing a business relationship, and allocating risk. A contract should make clear what services are offered, how much is charged, and how the services will be delivered. Additionally, it covers a client’s responsibilities and expectations. Finally, it addresses risks that might impact the relationship and ensures that both parties are adequately protected from those risks. This relates both to contracts with clients and contracts with hotels and vendors.

What differentiates a good contract from a bad contract?

A good contract is kind of like a good book, meaning every word matters. 

With that said, one aspect of a good contract is a thorough description of services. When it comes to describing these, the agreement should be specific and accurate. Typically, a scope of services goes into granular detail about how those services are completed, including deliverables, client responsibilities, payment timing and what happens if plans change midstream. A good contract accurately reflects the work that will be performed. It also might cover items that are out of scope — this is helpful in situations where a client is expecting  additional services that were not delineated in the original agreement to be provided for free. 

What should I consider when addressing risk in a client contract?

There is a lot that goes into protecting a business from risk. Here are three questions to get started, but make sure to talk to your own lawyer about specific situations.

First, does the contract address the impact of an event's cancellation on the business, including in the case of force majeure? If services are provided upfront prior to receiving any payment from the client, cancellation might have a big impact on your bottom line, and compensation for work already delivered needs to be covered in the cancellation wording.

Second, does the contract accurately describe the services provided? A vague or unclear contract could lead to a client requesting that additional services be provided for free. 

Third, does the contract accurately allocate responsibility between the business and the client? For example, consider such services as site selection. The planner might provide options, do research, conduct site visits, and facilitate the discussion between the client and the property. If the ultimate decision lies with the client, a good contract would make clear that the client has ultimate responsibility for approval of the site. 

What do independent planners need to know about signature blocks?

Poorly drafted signature blocks could create personal or company liability unintentionally. The best practice is to sign on behalf of the company, rather than in an individual capacity. Typically, when signing on behalf of a company, the signature block contains the name of the company, and the individual’s title with the company. If a signature block just has an individual’s name, it could be argued that the individual signed on their own personal behalf. 

When can independent planners sign on behalf of their clients?

The best practice is to have a clause in the contract that makes the independent planner the Agent of Record for the site-selection and contracting relationship. Then, the planner would only sign on behalf of a client once there is an explicit grant of Agent of Record to a company that allows that signature on that specific document. Without ensuring proper agent-of-record authorization, signing contracts could lead to liability. Talk to a lawyer to make sure you understand exactly what your contract needs to say in order to grant this authority properly. Learn more about becoming an Agent of Record here.

What are some practical ways of reducing risk?

When operating a business, there are some best practices to keep in mind. First, keep contracts up to date when changes are made. When altering the scope of work or the pricing, the best practice is to document that in writing and change contracts accordingly. 

Second, keep good documentation, in writing, of anything important. From client approvals, to client directions, to communication with vendors, getting important details documented in writing can provide a record if there is a dispute later. 

Last, when issues arise, address them early and often, before disputes escalate.

This article is for general informational purposes only. This article does not, and is not intended to, constitute legal advice. Reading this article or relying on its content does not create an attorney‑client relationship. Laws vary by jurisdiction and facts matter; you should consult a qualified attorney regarding your specific circumstances.