Essential Contract Clauses for Events for 2024 and Beyond

While every event and hotel contract must be unique in order to meet the needs of the meeting host, many clauses are universally essential for the current negotiating environment. But it is definitely a sellers' market right now, and generally, contracts are far less forgiving than in the past, making for a contentious climate.

For instance, prior to Covid, contracts would have specified situations where you could reduce your room block without liability. These days, you should consider booking the minimum number of rooms you will need, and then reserve the right to increase the block appropriately on the same terms and conditions to which you originally agreed. This is because attrition and cancellation fees are now very restrictive.

And don't expect much flexibility in agreements. For current contracts, you should develop a solid time line for reviewing certain elements. For example, a drop-dead date for going forward with the event should give you the right to reduce your liability or escape liability by giving appropriate notice. This isn't a force majeure issue — that clause deals only with impossibility that comes up at the time the event is to occur, where one or both parties is unable to perform. To give yourself flexibility now, you need to schedule review dates and the parameters that will be acceptable to make modifications or to cancel, using an enhanced cancellation clause and frustration-of-purpose wording. 

I do see, however, that people are getting smarter about how they are booking, and they are getting a better grip on the short-term booking process, and looking at second-and third-tier cities for more opportunities. But the basic law of economics, supply and demand, is still calling the shots for the most part.

Always, it's best to have your contracts vetted by legal experts in the field. And read each version closely to make sure no other changes show up. Also, ask questions, and seek changes if necessary for your organization. Track all changes carefully.

Here are some other contract-clause revisions and additions.

New clauses for the essentials list

Performance

Across the board, the hospitality industry has been faced with a pressing need for more employees, most particularly in the service areas, such as housekeeping and catering. Thus, one of the key new clauses to consider is how your group expects your venue to meet anticipated service levels. Details are important here: Instead of saying a hotel should meet the service levels expected from a four-star property, outline how often you expect housekeeping, turndown, and/or other services. Also, specify which facilities that were operational at the time you signed the contract must be available and fully staffed at the time the event is held. 

Anti-Discrimination

If a key policy or law that will have an impact on your organization or attendees changes in your destination, you will want an escape hatch. This clause should be very specific, detailing which change would affect your meeting attendance adversely. As an example, if you are a pro-life group, the expansion of pro-choice rights in a state might be anathema to your group. The same would be true of a pro-choice group where abortion rights are substantially limited or banned.

Frustration of Purpose

So often, we see everything in the contract except why we are holding a meeting, but that can be a key reason for cancellation. What’s the purpose of the gathering? What needs to happen in order to fulfill that purpose? Is it a product launch, but the product isn't ready? Are you expecting a former president as a speaker, but he can't come? Outline those circumstances in a frustration-of-purpose clause.

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.

2. Attrition

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. 

3. Cancellation by Either Party

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 as a result of something over which neither party has any control. 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.) Stick with these basics here. If you have specific areas that would require you to cancel or modify your event, and the requirements to be placed on the vendor, they should be set forth as well.

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.

8. Mitigation

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.

9. Notice

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.

7 More Contract Concerns 

1. Privacy

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.

2. Escape

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.

3. Commissions

Questions often arise 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 that 7 to 10 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.

4. Riders

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. Prevailing 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.

7. Hidden Fees

The war against junk fees is on the political warfront. Instead of waiting for Congress or a federal agency to protect your attendees, add a statement that “Hotel shall not charge organization or attendees any additional fees or charges except as stated in this agreement beyond the agreed-upon room rate without the prior written approval of the organization”. You might want to add “resort fees are waived for all attendees” or language of a similar nature.