Author: Melanie Zeidlhack

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

So we all have them – “pet peeves” – that is. They are the things that drive us crazy, though we often don’t want to admit them to others. Well, when it comes to hotel contracts, I have developed a certain set of pet peeves that have grown in length and importance over the years.

The following is a sampling of those pet peeves, what they are, why they are important, and how to avoid them.

Why Consistent Terminology Matters in Your Hotel Contracts

Is it a “contract” an “agreement,” or a “letter” – at the end of the day, it does not matter what you call the document – what matters is what the document says. 

Does the document include the key terms (“material”) – dates, room block, rates, etc. – and did the parties mutually agree on those terms? Assuming those elements (along with some other legal requirements — capacity to contract, consideration, etc.) are met, you have a legally binding document regardless of what it is called. 

However, when the document is “named” (typically in the introduction paragraph), that name should be used throughout the document. So once a “contract”, always a “contract”, once an “agreement”, always an “agreement”, etc. I also recommend that once a term is defined, it should be used with a capital letter, e.g., “this Group Sales Agreement (“Agreement”) is dated….” Then, thereafter, in the document, it should be referred to as “Agreement” vs. “agreement”. Similarly, references to the “group” and to the “hotel” should also be used consistently and, once defined, used with a capital letter as well, such as “XYZ Company (“Group”)” and “the Palm Tree Hotel (“Hotel”).”

While this pet peeve may seem “trivial”, there certainly is the possibility that failing to use terms consistently can expose the parties to interpretations which were not intended. 

This is particularly troublesome when it is likely that the people who negotiate the hotel contract may not be the same people when it’s time to perform the contract. If a term such as “group” is used inconsistently, for example, it opens up the possibility of the contracting group arguing that the “group” is really not the “contracting group” and, therefore, whatever obligation in the contract is not their responsibility.

Fortunately, a global search and replace feature easily avoids this pet peeve when preparing the document. But nothing substitutes for careful proofreading before the contract is signed!

How Sloppy Drafting Can Lead to Costly Contract Disputes

Wrong terms, wrong names, wrong dates – all of which I see too often in contracts. For example, if the hotel is issuing a new contract for a group and is basing it on another group’s contract, all references to the other group’s name should be updated to the new group. While some might say that we all meant that it was “this group” and not the “other group” when push comes to shove, the parties who negotiated the contract have moved on to different jobs long ago. Now, what was understood as what the parties meant was that they were arguing about it before a judge or an arbitrator.

Also, dates are often listed incorrectly – sometimes they are missing a month, day, or year, list a date from a previous contract, or include a date that has already expired. 

Again, careful proofreading is critical to ensuring that the parties understand the key dates under the contract, such as the cut-off date. 

Also, it is all too common to see gaps in dates in cancellation fee schedules. So, for example, if the cancellation fee schedule provided that the cancellation fee between the date of signing and July 31, 2020 was 25% of total room revenue and then the cancellation fee between December 31, 2020 and June 30, 2021 was 50% of total room revenue, what is the cancellation fee for the “gap period”, i.e., August 1, 2020 – December 30, 2020? I doubt the parties intended that there would be no cancellation fee during that time period, but this type of sloppy drafting exposes the hotel to the group making that very argument.

The Importance of Properly Syncing Amendments with Agreements

A term often used incorrectly in the contracting process is “addendum.” 

An addendum is a document which is attached to a contract (at the time the contract is signed) which provides further detail as to an item referenced in the contract.

For example, under “Function Space”, the contract may state that the hotel is obligated to provide the group with such function space as outlined in Addendum A to this contract. Then, Addendum A details the dates, times, room names, room sets, function type, and any fees. If, after the parties sign the contract, they want to make a change to the contract, the proper term for the “change document” is an “amendment” — not an “addendum.”

Setting aside my pet peeve on the terminology, the real issue is that when a contract is amended, the parties often do not properly amend all applicable provisions in the contract. For example, if the group reduces its room block, the amendment likely needs to include more than just the new room block. It will need to include references to all other provisions in the contract that were tied to the original room block, e.g., room block attrition and total room revenue. So if the minimum room block was listed as an exact number (let’s say 780 – the hotel is giving the group a 20% cushion for slippage) and the room block is reduced, the new minimum room block should be listed instead of 700 (the new minimum based on the 20% slippage. Otherwise, the group is bound to 780 as its minimum room block for purposes of attrition.

I had a client change the dates of its meeting – pushing the meeting three months ahead of the original meeting dates. The parties signed an amendment to the contract as to the new dates and room block, but they failed to amend the cancellation fee schedule which included dates based on the original meeting dates. As fate would have it, the group then canceled their meeting and a dispute arose over whether the cancellation fee was truly based on the original meeting dates (which would mean the group would pay a larger cancellation fee) or whether it was understood that those dates should have been adjusted as well with the date change. This dispute could have been avoided altogether with a proper review of the contract.

Bottom line, when amending a contract, look closely at each provision in the contract and ask yourself whether the change(s) being made will impact that particular provision. If so, that provision should be updated and included in the amendment.

Beware the “Dangling Counteroffer”

Many of you probably remember grade school grammar class and the dreaded “dangling participle”. Well, I now often refer to what appears to be a contract but is really as counteroffer as a “dangling counteroffer”. 

So how does this happen? 

It happens when the parties are busy negotiating the contract and fail to recognize that the document offered by the hotel and the document signed by the group are not a “mirror image” (identical) to one another. 

Remember Contracts 101, an offer has to be accepted on the exact terms it was made – otherwise, it is a counteroffer that needs to be accepted on the exact terms on which it was made.

For example, the hotel sends the group a signed contract, and the group makes handwritten changes to the contract, initials, and dates for each change, and signs the contract. The hotel receives the document back but never countersigns it — so essentially, it has not accepted the group’s counteroffer. 

Silence is not acceptance. 

What likely occurs is that the hotel sees the group’s changes and determines that they are acceptable to the hotel without communicating that to the group. 

Many years ago, I had a client who had the exact same thing happen to them. 

Signed contract from a hotel.

The group changed room blocks, rates, and other provisions. 

Signed it and sent it back to the hotel.

Then, never heard back from the hotel.

Years went by, and the parties saw one another at various conferences, all the while stating that they were looking forward to meeting at the hotel. 

Then, one year out, a new board of directors comes on for the group, and they determine that they don’t want to have their meeting at the hotel and instead want to move their meeting to another hotel – thereby raising the question, “How much is the cancellation fee?.” When I received the “contract” in order to answer this question, I noted right away that the parties did not have a contract: they had a dangling counteroffer. 

The hotel never countersigned the contract.

So we took the position that the group was “withdrawing its counteroffer” and gave notice to the hotel. The hotel challenged the group and sought cancellation fees, which it claimed were due under the contract. However, the hotel could not enforce those damages because there was no contract. The parties resolved the dispute, but ultimately, if challenged, a judge or arbitrator would likely review the facts and take the position that the parties “believed” they had a contract and that “belief” was enough to entitle the hotel to monetary damages for the group’s cancellation. Still, those damages would likely be much less than the cancellation fees listed in the hotel contract if it had been a true contract. 

Turning One-Way Street Provisions into Two-Way Agreements

Hotel contracts are often fraught with provisions such as “hotel reserves the right to…..reassign function space, raise prices, reduce the room block, etc.” Essentially, it’s a one-way street – the hotel has the unilateral right to do something to the group without the group’s permission. 

So, the goal is to revise all “one-way street” provisions to “two-way street” provisions by changing provisions such as “reserves the right to reassign group’s function space” to “the hotel may reassign group’s function space if the group gives the hotel consent to do so.”

The key with any change is to have the mutual agreement of the parties, but if the contract allows for a one-way street, that one-way street is enforceable.

Why Handwritten Changes on Contracts Can Put Your Event at Risk

Last, it should go without saying that my top pet peeve is handwritten changes on a contract. 

While handwritten changes, if done properly, may be enforceable, the likelihood is that they are not enforceable.

Why?

Because often the handwritten changes are not countersigned by the hotel (thereby becoming a dangling counteroffer as noted above) or the changes are illegible (and the person who made the changes no longer works for the group). 

The bottom line is that if you have handwritten changes, ask that the contract be updated to reflect them. The goal is to have one clean contract that both parties can follow and enforce.

So, the next time you review a hotel contract, put your organization in a good position by avoiding these pet peeves of mine.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

Mind your manners.

That is a statement that many parents say to their children as they are growing up and learning how to interact with people. Yet, with almost a daily dose of news involving sexual harassment and other inappropriate behavior by individuals, many organizations have begun to consider whether they need a code of conduct to avoid problems at their meetings. The issue is whether this reminder to “mind your manners” will effectively prevent individuals from engaging in bad behavior during meetings and, if they do, provide a clear path of action for the organization sponsoring the meeting.

While a code of conduct will not prevent individuals from engaging in inappropriate behavior, it does serve to set the tone for the meeting. As such, it is a good idea for organizations to consider developing one.

The Impact of Alcohol & Substance Use at Professional Events

At the outset, it is important to note that among the many reasons meeting attendees engage in inappropriate or bad behavior at meetings is that they are consuming alcoholic beverages during the meeting and related events. The more alcohol the individual consumes, the more likely the individual will engage in inappropriate or risky behavior. 

This cause and effect has presented many challenges to organizations over the years. 

Do they stop serving alcohol at their meetings? Or limit the amounts of alcohol served? Or simply have cash bars? These are all questions that an organization must consider.

While alcohol may lower a person’s inhibitions and make people feel more comfortable networking with others, the risks to that person, to other people, and to the organization are great. As such, every organization should evaluate its risk regarding liquor liability and related issues.

In addition to alcohol, many states now permit the recreational use of marijuana. This legalization may cause people who may not have otherwise tried marijuana to try it for the first time and, as such, cause that person to engage in inappropriate or risky behavior. Here again, any organization sponsoring a meeting in a state that has legalized the recreational use of marijuana must consider its effect on attendees’ conduct.

Regardless of whether inappropriate behavior is caused by alcohol, marijuana, or other factors, there is no place in meetings for such behavior.

8 Essential Components of an Effective Meeting Code of Conduct

The following are considerations for an organization in developing a code of conduct for its meetings:

1. What is the purpose of the meeting?

The organization should communicate the purpose of its meeting on its website and in all materials relating to the meeting. It is of key importance to highlight the professional nature of the meeting.

2. What is the expected behavior during the meeting and related functions?

The expected behavior should be framed based on the meeting’s stated purpose. For example, if the meeting’s stated purpose is to create a professional environment for networking and marketing opportunities, then the expected behavior should be consistent with this purpose.

3. What is the expected dress for the meeting?

It is important to be specific in terms of what types of dress is expected and dress which is not acceptable.

4. What if an individual engages in inappropriate behavior?

The code should provide that the organization will address instances of inappropriate behavior appropriately.

5. What if an attendee is the victim of inappropriate behavior?

The code should address the method for reporting instances of inappropriate or bad behavior. Some organizations may want to consider having an “ombudsman” person or desk to make it easy for people to report any concerns.

6. What is the process for reporting, reviewing, and addressing complaints of inappropriate behavior?

The process should be referred to in the code but then expanded for staff so that everyone knows what to do when they see people engaged in inappropriate behavior or have it reported to them. Of utmost importance is to ensure confidentiality and due process. The organization should have its legal counsel to draft or to review this process.

7. What are the repercussions on an individual who has engaged in inappropriate behavior?

The code should state that individuals who engage in inappropriate behavior will be subject to removal from the meeting without refund and possible prohibition from attending future meetings.

8. How will the organization communicate and/or address inappropriate behavior to other attendees, its stakeholders, and the public?

This is an important aspect of the code, which should be detailed to the organization’s staff. This includes social media postings, other meeting announcements, and the organization’s website.

So when it comes to minding your manners, a little coaching and teaching now and then doesn’t hurt. Organizations should be proactive when working to avoid instances of inappropriate behavior rather than being reactive following occurrences of such behavior. 

When in doubt, always mind your manners!

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

With much focus on provisions such as services, fees, cancellation, and force majeure, many event professionals may be bleary-eyed by the time they reach the end of the contract. Yet often at the end of the contract are the “boilerplate” provisions which could be very costly to the group. As such, it is critical for event professionals to watch out for these clauses and know which issues to flag and to address in contract negotiations.

Prevailing Party Attorney’s Fees

The general rule in the United States is that each party pays for its attorney’s fees unless they agree otherwise in a contract. In contracts, the other party will often include language addressing the payment of attorney’s fees, such as the following:

“In the event of any dispute involving this Agreement, the prevailing party is entitled to recover its attorney’s fees and costs from the non-prevailing party.”

While this language may seem innocuous, its effect is anything but innocuous. Though softly worded, the provision has a significant impact: the losing party pays the winning party’s attorney’s fees and costs in addition to its own attorney’s fees and costs. This provision often rears its head in settlement negotiations, with the other side saying that they will be the winner, and therefore, if a settlement is not reached, the other side will be paying double the amount of attorneys.

Documents Incorporated by Reference

So the contract is the contract, and the group can be bound by nothing else—correct?

That statement may, in fact, be false if there are provisions in a contract that incorporate other documents merely by referring to such documents by reference. Often, the language will be included as follows:

“The terms of this Contract, together with the policies and procedures of the Facility, shall constitute the parties’ entire agreement.”

Again, while this provision may appear innocuous on the surface, its impact can be costly for the group.

When I see this type of provision, I will frequently ask my clients whether they have received a copy of the Facility’s policies and procedures. If they have not, I recommend they do so and ensure that they agree with all terms included in the document because the group will be bound to its terms by referring to the policies and procedures as indicated above. If the group agrees with the terms, then the language can remain in the contract; however, the group will want to modify the provision to state “the policies and procedures of the Facility as attached” so as to ensure the group will not be bound to modifications to the provision.

One follow-up point on this issue is that when I ask whether the event professional has received a copy of the policies and procedures, many event professionals will tell me that they asked the Facility for a copy. The salesperson told them that the policies and procedures are not written but instead determined by the Facility on a case-by-case basis. If that is the case, the provision should be removed as the group cannot be bound to terms of which it has not been notified.

Controlling Documents

While the parties work hard to ensure that the contract fully addresses all issues that could arise, it is often necessary for the parties to later sign an addendum to the contract that modifies the contract provisions. These modifications often relate to key items such as the room block, rates, or function space.

It is anticipated that when these additional documents are signed, their terms will supersede and replace the terms of the contract, yet that may not, in fact, be the case if the contract includes the following provision:

“If there is any inconsistency between the terms of this Agreement and the terms of any addenda, the terms of this Agreement shall control.”

As such, this provision will often set up a battle of the documents. This is especially true if the addenda later states that if there is any inconsistency between the terms of this addendum and the terms of the Agreement, the terms of this addendum shall control. In order to avoid this battle, groups should work to remove the provision noted above and include the language noted in this paragraph in any addendum, which provides that the terms of the addendum will be controlled.

Dispute Resolution

Just as with any happy beginning, organizations and their customers do not often anticipate anything other than a happy ending. Yet, if disputes arise after the contract is signed, any dispute resolution provisions that may be hiding out in the contract’s fine print may prove costly for the group.

While there are many ways to resolve a dispute, many event professionals may not know which method is the best for their organization.

Is litigation, mediation, or arbitration best for the group?

While opinions on which method differ, one thing is certain: each method has its own advantages, disadvantages, and costs. It is important that the group review dispute resolution options with its legal counsel before it agrees to them in the contract. Often, the language in the contract makes the chosen dispute resolution provision the only way of resolving the dispute, such as the following:

“Any disputes arising out of the terms of this Agreement shall be resolved by arbitration according to the Commercial Rules of Arbitration of the American Arbitration Association. The determination of such arbitration shall be final and may be enforced by courts.”

The above provision makes arbitration the only option for resolving disputes, so the group cannot pursue a claim in its local courts or submit it to mediation unless the other party agrees otherwise.

The best way to manage these provisions is to seek direction from the organization’s legal counsel before the contract is signed regarding which dispute resolution method is best for the group.

So the next time your eyes get bleary, and you are eager to gloss over the contract’s fine print, stop and focus on these important provisions. What may be included in them may be costly for the group and waive any savings the group is experiencing in the contract.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

Have you ever worried about something happening only to find that it did not happen and something else you did not worry about happened instead? 

Whether in life or in your organization’s meetings and events, planning for the unexpected is critical. The approach should be to hope for the best but plan for the worst and hope that because you have a plan, the worst will not happen.

In today’s climate, hotel occupancy is rising, and future business prospects are bright. While we all benefit from a booming meetings industry, this increase in demand with a limited supply of hotels puts organizations at a disadvantage. The unexpected is happening increasingly in today’s seller’s market, and meeting professionals should prepare for those occurrences. Following is a summary of some unexpected occurrences that have affected my group clients.

Shield Your Event from Unexpected Hotel Cancellations

If you are toiling under the assumption that a hotel would never cancel a contracted meeting, that mindset needs to change. There has been a significant increase in hotels canceling on contracted groups in the last few years. Often, the reason for the cancellation is that the hotel will be replacing the group with a significantly more lucrative group with the promise of multiple meetings. Further, many of these cancellations occur very close to the group’s meeting dates, making the search for an alternate hotel more challenging.

The key to preparing for this unexpected event is to include strong language in the hotel contract addressing cancellation by the hotel. Such language would allow the group to recover direct damages (all costs associated with finding an alternate hotel), indirect damages (the second tier fallout from the cancellation, e.g., as a result of the change in hotels, the group loses sponsor), and attorney’s fees – the last two which you only get if it is specified in the contract. Here’s a sample provision:

Cancellation by Hotel – In the event of a cancellation of this Agreement by the Hotel not otherwise permitted under this Agreement, the Hotel shall pay Group for all direct, indirect, and consequential damages, expenses, attorney’s fees, and costs incurred by Group on account of such cancellation including, but not limited to, staff time and travel expenses to secure an alternate location for the Event, incremental room rate and airfare differential, function space rental, and airfare differences, and long-distance telephone, postage and printing costs, attorney’s fees.

If you haven’t included this language in your contracts, do not worry. The law provides for recovery of direct damages in the event of a breach but the group will be able to have more costs covered if this provision is included in the contract.

Secure Room Block Flexibility

Many of you have become accustomed to hotels being willing to increase the group’s room block at the group rate. Those days are definitely gone or are significantly limited. With the hotel likely able to sell rooms at rates higher than the group rates, additional rooms will likely be offered at a higher rate. Legally, the hotel is not required to offer more rooms than contracted at the group rate.

My recommendation to address this unexpected development is to include language in the hotel contract, allowing the group to increase its room block at the group rate. While these rooms will be based on availability and likely be subject to a maximum increase, they will be offered at the group rate. Here’s a sample provision:

“Group reserves the right to increase its room block by up to 10% on a space available basis at the group rate.”

This provision is among those that do not “hurt” to include in a hotel contract if the unexpected occurs.

Prevent Unwanted Function Space Reassignments

After you have done all the research, site visits, and function space layout (with room names included, which is always recommended) for the hotel, the last thing you might expect would be for the hotel to reassign your organization’s function space. 

More and more organizations are experiencing this occurrence because the hotel is trying to accommodate other businesses. To make matters worse, most hotel contracts include a provision permitting the hotel to reassign the organization’s function space without their consent.

In order to be in the best position if this reassignment occurs, I recommend organizations ensure that their hotel contract does not include the provision noted above but instead includes a provision that requires the organization’s consent to the reassignment. Here’s a sample provision:

“The Hotel shall not reassign any of the function space listed in the attached Function Space Agenda without the prior written consent of the Group.”

Remember that if you see language that says the hotel will “notify” or “consult” with the organization regarding function space changes, that language is not as strong as “consent” and can leave the group vulnerable to reassignment.

If function space is reassigned regardless of the contract language, organizations should ensure that the alternate space is equal to or better than the contracted space. The hotel will provide financial concessions to offset the organization’s costs and inconvenience.

Contract Clauses for Technology Failures

I often say that today’s “fingernails on a chalkboard” is that the hotel’s wireless Internet service is not working. Many planners have heard complaints about that from attendees with two or three mobile devices that they want to use during the meeting. Yet these breakdowns in wireless Internet service or overcapacity of users/devices often occur, rendering organizations helpless to recover service during the meeting.

I recommend including language in your contract which specifies the bandwidth and capacity of the hotel’s wireless service. The provision would also require the hotel to address service interruptions and accommodate the group for outages promptly. Here’s a sample provision:

“Hotel represents and warrants that its facility, equipment and services meet with Group’s technology requirements and that its wireless Internet service will function in proper order and speed as may be needed by the Group. The Hotel shall also provide industry standard protection for Internet, network (including network segments) and physical IT security to provide reasonable expectations for data confidentiality, privacy, integrity, and availability. Should there be a failure to meet Group’s technology requirements during the Event, Hotel shall work to correct any such problems immediately and at its cost. Any costs incurred by the Group in connection with remedying technology problems shall, at Group’s option, be paid by Hotel or credited to the Master Account.”

From a practical standpoint, I recommend that groups with heavy internet requirements plan ahead for the possibility of an interruption in wireless Internet service and have a backup plan to provide such service if necessary.

Managing Food and Beverage Allergy Risks

With the presence of food allergies on the rise, many organizations often overlook the possibility of food allergies or at least overlook allergies beyond peanut allergies. While each individual is expected to monitor the food they eat at a meeting and ensure such food is free from allergic ingredients, attendees have become accustomed to organizations inquiring about food allergies (which is recommended) and selecting menu items that do not contain these ingredients, far too many organizations do not ask about food allergies or if they ask, they are not prepared to properly accommodate those allergies.

Organizations can include language in their hotel contract to ensure the hotel will assist the group with compliance to address these unexpected allergies. Here’s a sample provision:

“The Hotel shall work with Group to ensure attendees with food allergies are appropriately handled by the Hotel’s catering department. Such assistance includes offering menu selections which avoid specified ingredients, ensuring the food to be served is labeled, and listing the foods ingredients below the food name.”

From a practical standpoint, planners should be prepared on-site if an attendee suffers a food allergy reaction. As with any other medical situation at meetings, the organization should be prepared to respond appropriately and train onsite staff to do the same.

In summary, expect the expected and the unexpected. Plan for common and uncommon issues in your organization’s contracts and undertake practical measures to ensure an expected or unexpected occurrence will be addressed in the best interest of the organization.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

With the continued growth in the size and scope of conferences and trade shows and the trend for organizations to host their conferences and trade shows together, many planners may be finding themselves for the first time having to work with a convention center as a venue rather than holding the conference or trade show at a hotel.

Convention center license agreements are not often “user-friendly” documents to review. Many are quite lengthy and vary from one another.

As most convention centers are owned by governmental or quasi-governmental entities, such as cities, additional constraints, and regulations exist when negotiating such agreements.

While there are a myriad of legal issues surrounding convention center license agreements, the following are my top 6 legal issues to address in convention center license agreements:

1. Confirmation of Space, Dates, Times, and Rates

License agreements should include a detailed summary of the space to be utilized by the organization, including the room names, dates, and times from move-in through move-out. It is important to note that the center may not reassign any of the contracted space without the organization’s prior written consent.

Further, the agreement should also detail the rates for such space. Some centers offer flat fee rates, while others base rates on total square footage. Most offer discounts based on food and beverage expenditures (see 2 below). If the rates are based on total square footage, it is typical to exclude office space and other non-revenue-generating space from such calculations.

2. Exclusive Services

Planners should carefully review which services are exclusive to the center—meaning that those services may only be provided by the center’s vendors. Often, these are safety-related services such as rigging, electrical, and plumbing, but they can also expand into non-safety services such as food and beverage, business center services, computer rentals, and floral.

Planners may find success in negotiating out of exclusives for non-safety services. Note that the organization will need to enter into separate contracts with each vendor. Getting copies of those contracts before signing the convention center license agreement is often helpful.

3. Food and Beverage Minimum/Discounts

Most convention centers offer license fees discounts based on the total amount of food and beverage expenditures, which is an incentive to host food and beverage events at the convention center rather than the hotels.

These provisions are often not clearly written, so planners should take extra care to ensure they fully understand them.

Also, if the group will have sponsors or affiliate groups (“ICWs”) holding food and beverage events at the center, it is important to ensure that any revenue generated by the ICWs is credited toward the group’s total food and beverage expenditure.

4. Insurance

License agreements often contain very detailed insurance requirements that are much different from those required by hotels.

It is important to provide the organization’s insurance broker with a copy of such requirements before the contract is signed to confirm that the organization can meet the requirements.

If not, the organization can try to negotiate changes to these requirements before the contract is signed.

5. Indemnification

While many planners are accustomed to mutual indemnification clauses in hotel contracts, mutual indemnification provisions in convention center license agreements are a rarity.

Often, the centers are restricted from indemnifying the organization due to state or local laws because a governmental or quasi-governmental entity owns the center. Having said that, it is important to always ask that the indemnification clause be made mutual as more and more centers are offering some level of mutual indemnification. Also, it is critical that the organization’s attorney review the indemnification provision, which obligates the organization to indemnify the center.

There are many tricks and traps in such provisions that are important to identify and try to revise, such as “sole” indemnification.

6. Rights of Cancellation

Just as with hotel contracts, there are many reasons why an organization would need to cancel the license agreement.

One reason may be for business reasons – in other words, the organization decides not to host the event. License agreements typically include a sliding scale cancellation fee provision similar to those in hotel contracts. Often, there is no provision that the center re-license the canceled space and, if it does, credit back cancellation fees to the organization, so it is important to ask for such a provision.

It is also important to include the instances in which the organization would need to cancel the license agreement without liability, including force majeure, construction, labor disputes, or unavailability of headquarters hotel(s).

For force majeure, the provision is often one-sided, meaning it only applies if something happens to the convention center—not if the organization or its attendees cannot travel to or use the center. Thus, the provision needs to be mutual and should include a reference to performance being “commercially impracticable” in addition to (or in lieu of) being impossible or illegal.

It is also critical to include a construction clause that requires the center to notify the organization of any planned construction and its plans to ensure there will be no impact on the organization’s meeting. If the parties cannot agree on such plans, the organization should have the right to terminate the license agreement without liability.

Other rights to cancel without liability to address in the license agreement include strikes or labor disputes at the center and the unavailability of the organization’s headquarter hotel(s).

Just as every hotel contract may differ, convention center license agreements are much the same and require careful review by the organization and its legal counsel.

One final note: Many convention centers have very detailed policies and procedures or guidelines for using the building. It is important for the organization to review those along with its decorator to ensure there are no concerns that would impact the conference or trade show.

As always, be careful out there!

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

You have probably heard the saying, “Hope for the best, but plan for the worst.” 

While many meeting and event professionals work hard to anticipate problems that might arise during their meetings and events, the reality is that often, the biggest challenges are those that cannot be anticipated or planned for before the meeting. 

What can planners do to plan for the unexpected challenges? 

The following are four true stories of challenges faced by meeting and event professionals, how they were resolved, and what could have been done to avoid or minimize the problems that ensued.

No Rooms at the Inn

Just three weeks before its annual meeting, the meeting planner for a professional society learns that the luxury brand hotel scheduled to host her group’s meeting will be undergoing exterior renovations. As a result, the hotel will not be able to provide sleeping rooms to the group. 

The hotel proposed to the planner that since it could host the function space, it would transport attendees to and from the hotel by bus to a nearby limited-service hotel. Knowing that the hotel’s proposal was unacceptable, the planner worked to secure rooms and function space in another luxury brand hotel.

Meanwhile, the group advised the original hotel that, due to its inability to provide sleeping rooms as required by the contract, it was in breach of its contract. Thus, all obligations were terminated, and the hotel would be legally responsible for all monetary damages incurred by the group to move its meeting.

Once the alternate hotel was secured, the original hotel was advised of the summary of the monetary damages incurred by the group due to the hotel’s breach. Those damages included the difference in room rates between the original and the alternate hotel, the difference in food and beverage prices between the original and the alternate hotel, costs to notify the attendees of the change in location, costs to update the website, and attorneys fees to review the contract for the alternate hotel.  Documentation of such charges was also provided. After reviewing and discussing the damages, the original hotel accepted the summary and paid the group for its damages.

Although this story has a happy ending, the group could have put itself in a stronger position with the original hotel by including a provision in the contract to address the possibility of the hotel’s cancellation. That provision would include a detailed listing of those categories of items and costs for which the hotel would need to pay monetary damages if it could not provide the rooms or function space required by the contract.

The Speaker and The Scandal

Just three days after entering into a contract with a keynote speaker, a nonprofit organization learned on the national news that the speaker was involved in a scandal that alleged that he had engaged in illegal and unethical behavior. 

Once the group learned of this development, they quickly assessed their options, including canceling the speaker contract. Unfortunately, the contract did not allow the Group to cancel for such reasons; instead, the group would have to pay a cancellation fee. 

After discussing this issue with the speaker’s bureau, the bureau agreed to allow the group to apply its contract and fee toward another speaker. The group accepted this proposal and contracted with another speaker.

While the group was pleased that the speaker bureau understood its concerns and addressed them regardless of what the contract said, the key takeaway from this story is that strong language in the speaker contract should be included regarding the group’s right to cancel due to issues or concerns involving the speaker. 

Typically, in speaker contracts, there is a broad right for the speaker to cancel for reasons such as illness, death of a family member, and even “overriding professional obligations,” but this right is one-sided. By converting these provisions to mutual rights, the group will be better positioned to protect its interests with this important investment.

“Under-departed” and The Snowstorm

How does a snowstorm in the northeast affect a meeting in Florida?  When the attendees from the meeting before are unable to travel back home to the northeast.  That’s just what happened to one group a few years ago.  When it and its attendees arrived in Florida for their meeting, they learned that the hotel was not able to provide their sleeping rooms or function space because the group before did not check out of the hotel as scheduled because they were unable to travel home to the northeast. 

Once alerted to the problem, the hotel secured sleeping rooms at a neighboring hotel and provided function space to the group. Ultimately, the holdovers could travel home, and the group could move its sleeping rooms back to the hotel.

This issue of being oversold — or, as one hotelier put it to me, “underdeparted” — can be a major disruption to a group’s meeting. And yet despite efforts to put strong language into the hotel contracts, these “underdeparted” situations will still arise from time to time and therefore need to be managed from a practical standpoint outside of the contract.

Party of Two for the Ballroom?

Just two weeks before its annual sales meeting, a corporate meeting planner discovered that the ballroom reserved for her company’s general session programs was now reserved for another group and would not be available for her company’s use. 

Although the contract did not state that the hotel could move the group’s function space, the hotel made such change anyway. 

When challenged on this change, the hotel stated that the change was due to the fact that the group would not be using its minimum room block, and therefore, the hotel found another group who would replace revenue at the hotel. 

The alternate space offered by the hotel was inferior in size, location, and amenities. 

While the group continued to challenge the hotel’s right to move its function space, it contacted its decorator about the alternate space and whether it could be made to work for the general sessions. Following such discussions, the group determined that the alternate space would work for the group. 

Now, the negotiations over what the group would receive from the hotel as a result of this change began. 

In addition to paying the group’s additional costs to move the general session (including decor, lighting, and signage), the hotel agreed to waive more than $20,000 in room block attrition fees the group would have been responsible to pay under the contract terms. So, in the end, while not happy about the alternate space, the meeting went from a financial failure to a financial success due in part to the hotel’s change in function space.

There are really two key learning points from this story. 

1. Make sure that hotel and convention center agreements include language which requires the hotel or center to obtain the group’s prior consent to any function space reassignments.
2. When any challenge such as the double-booking of function space occurs, remember that sometimes that challenge can be a good thing.  Often, it gives the group leverage to negotiate concessions which will be financially beneficial to the group.

So, the next time you hear a story from a meeting professional about something going wrong at their meeting, don’t just think that the same thing can’t happen to you — think of what you would do to make sure the problem never arises in the first place.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com