by Sarah J.F. Braley | July 01, 2014
Our Panelists

John S. Foster, of the Atlanta firm Foster, Jensen & Gulley, handles the legal aspects of meetings, conventions, trade shows, events and association management. 

Jonathan T. Howe, M&C's longtime legal columnist and a senior partner of the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., specializes in meetings and hospitality law.

Lisa Sommer Devlin, based in Phoenix, has concentrated on hospitality law since the early 1990s, working on standardized contracts and meetings-related litigation for major hotel chains. 

Joshua L. Grimes, managing attorney of Grimes Law Offices in Philadelphia, specializes in the hospitality, association, real estate and corporate industries.

Steven M. Rudner of Rudner Law Offices in Dallas, represents hotels, resorts and conference centers in group-sales contract matters.

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Long gone are the days when a handshake over details scribbled on a napkin was enough to constitute a contract for a meeting or event. Today's contracts are long and increasingly complex. Which clauses are most critical? What are common mistakes planners make?

M&C asked five of the most respected meetings-industry attorneys for their insights and opinions on the current state of hotel meeting contracts.

What is the most important clause, and how has your opinion of that changed during the 2000s? 

John S. FosterJohn S. Foster: All clauses in hotel contracts are important, with some more than others. This has become evident since the 1990s, based on actual cases and controversies in the industry. The most important is the attrition clause, because hotel contracts deal with future performance, and meeting sponsors must deal with a lot of unknowns. The biggest unknown at the time of the contract is exactly who and how many people will attend the meeting.

Before attrition clauses, meeting sponsors were required to use their "best efforts" to attract people to attend and reserve at the headquarters hotel. If they didn't fill all the rooms in the block, the hotel took the unreserved rooms back at the cutoff date and attempted to resell them to others. It was the hotel's responsibility to sell them or eat them after the cutoff. Attrition clauses shifted the risk of low pickup to the meeting sponsors. Now, if rooms are unsold at the cutoff date, the hotel attempts to resell them to others. If they go unsold, the meeting sponsor is liable for paying for them.

Yet, the 2000s have underlined the critical importance of force majeure clauses. The industry now knows that specific occurrences can cause major disruptions to travel that are beyond control of the meeting sponsor or hotelier. To name a few: 9/11, Hurricane Katrina, the SARS epidemic, the eruption of Iceland's Eyjafjallajökull volcano. Contract law provides certain standards that, if they occur, allow one or both parties to suspend or terminate their performance obligations. The standards are impossibility, impracticability and frustration of purpose.

Jonathan T. Howe 0714Jonathan T. Howe: The most important clause in the contract is likely the one that takes you to court or arbitration. In other words, there is no one important clause. The contract is taken as a whole, and thus every clause is important depending upon the needs of the hotel and the planner. Contracts have gotten longer, in my opinion, because of bad experiences -- burn me once and you won't burn me again, because I will cover it in my next contract.

But a risk you might encounter at one venue does not mean it is a universal risk. Hurricanes generally do not occur in Iowa. You don't need an Americans with Disabilities clause in Canada. A contingency that the convention center be available does not need to be included in an agreement for a meeting of 50, etc. Cover the essentials, and delete requirements that are not applicable with the scope of the event at hand.