Get Smart at Destination Caribbean
Whether interpreting clauses, navigating contract jargon or aiming to avoid legal battles regarding your meeting, head to Destination Caribbean
to sharpen your contract negotiation skills.
All meetings need solid contracts outlining the responsibilities of the host, the venue and all service providers. These days, most hotel companies now provide a standard contract for meetings; and often planners also have their own. The party providing the form is going to use their contract to look out for their own best interests, and not necessarily those of the party on the other end of the agreement. When you read, "It's our policy..." your response should be, "Well, it's our policy..."
From Oct. 20-23, 2019, I will be participating in and speaking at Northstar Meetings Group's Destination Caribbean, the leading hosted-buyer event for meetings and incentive professionals looking to book business in the Caribbean. There, I will delve further into the inherently complicated and mired topic that is hotel and venue contracts; addressing the latest sticking points in negotiations and answering the legal questions planners continue to scratch their heads over.
Of key concern when it comes to planner contracts on any level is that forms sometimes become stale. Don't fall into the trap of thinking your form covers all given situations, or that the venue's form is covering all your needs. In actuality, it probably isn't. Always read and be sure you understand every single contract line before adding your signature to the end.
Leading up to Destination Caribbean, let's explore the labyrinth of contract clauses. The following are the must-haves, plus some suggestions for bringing contracts into the 21st century.
Essential Event Contract Clauses
1. ADA requirements
Contracts for events in the U.S. should specify both the facility and the meeting sponsor that will be responsible for each requirement of the federal Americans With Disabilities Act.
Be very specific, detailing your organization's right to be credited for all rooms, regardless of how they were booked by attendees, subject to verification.
Set forth obligations, such as dollar amounts, without the need to resort to litigation or arbitration, in the event one of the parties cancels. The clause also should address the circumstances under which the planner can cancel without liability.
4. Condition of Premises
This requires the property to be in the same or better condition than it was when the contract was signed.
5. Dispute Resolution
If you want to use binding arbitration (a good idea for offshore meetings), add a clause saying it is required, plus procedural rules, how the arbitrator will be selected and where arbitration will be held.
6. Force Majeure
This serves as protection against so-called acts of God (e.g., terrorism, extreme weather, strikes, outbreak of disease) that make it impossible for either party to fulfill their contract. Outline the steps the selected facility will take (including emergency medical attention and evacuation) if a disaster, whether natural or man-made, occurs during your event. (Find a sample clause here.)
7. Liquor Liability
If alcohol will be served, require the provider to indemnify, defend and hold harmless the meeting sponsor in the event of any liquor liability claim. Also, require servers to be trained in alcohol awareness and intervention procedures, to demand age verification at their discretion and to refuse to serve anyone who appears to be intoxicated.
This clause requires either side to lessen potential damages, whether for cancellation, attrition or other breaches of contract, by using a specific formula for how resales will be calculated, if necessary, as well as the dollar amount to be paid.
Spell out how and to whom notice of changes or cancellation, as might be required under the contract, is to be provided and when it becomes effective.
10. Facility Unavailability
Agreements for citywide events must include a clause that states the contract is contingent on the availability of the convention center and all hotels and suppliers contracted by the event host; all parties must be named in the document. It also should stipulate that if any of these facilities becomes unavailable, the sponsor can cancel without liability.
6 More Contract Concerns
Contracts today are invoking requirements to keep attendee data safe. These clauses are very defensive in nature, shifting the responsibility for obtaining permission to use someone's personal information away from the sponsor of the event. Hosts do not want to be in that position, because they don't have the authority to waive their attendees' rights.
This clause describes how a host can withdraw from a multiyear contract without liability. You must include certain key elements that would allow you to do this, such as attendee dissatisfaction with the premises, changes in the premises, outgrowing the premises and economic turndown in your industry that would diminish the number of room nights you would use, along with any other situation that only you can identify for your group. In some of these cases, you might want to open up the agreement to renegotiation as opposed to cancellation without liability
Now that many hotel chains have cut commissions to third-party planners from 10 percent to 7 percent, questions have arisen concerning who is entitled to the money and when they earn the commission. If you are a third-party planner, you want to assure that you don't jeopardize losing even that 7 percent. In the contract, spell out that you will earn the commission at the time the contract is signed and that the amount will be determined at the time of the performance of the event
More riders or addenda are being tacked on to contacts. Riders generally come after the signing and are, in fact, a renegotiation of some of the terms. Addenda are clauses that are added to the initial contract, modifying or changing its terms. These additions have ripple effects: You want to make sure that you have checked every other clause of the contract to determine what impact, if any, the rider or addenda has on the basic terms
5. Failing Party
In the event of a dispute, this clause allows the prevailing party in the arbitration or litigation to recover costs and attorney fees. I am cautious with prevailing-party clauses, because they invite litigation or arbitration where otherwise the parties would attempt to mediate the amount at issue. Be wary of signing any contract that provides for a prevailing party unless you are cocky enough to think that you will be victorious in all situations.
6. Attendee Responsibility
Hotels often include a provision that the host organization will be responsible for any damages or losses incurred by the hotel as a result of the actions of anyone who attends the group's event. Do not be a guarantor of the good behavior of your attendees.
Always, it's best to have your contracts vetted by legal experts in the field.
Jonathan T. Howe, president, senior and founding partner, Howe & Hutton Ltd. is recognized as one of the true leaders of the not-for-profit organization bar as well as the hospitality and meetings, travel, incentive, hotel, and trade show industries and for trial and appellate advocacy. The longtime legal expert and columnist for Meetings & Conventions, he has written hundreds of articles and papers on hospitality and meetings, and has spoken to organizations all over the world. He is also general counsel to Meeting Professionals International, the U.S. Chamber of Commerce Association Committee of 100, the Sports & Fitness Industry Association and the International Live Events Association, as well as special advisor to the American Bar Association Standing Committee on Meetings and Travel.