Not so long ago, the language in a standard meeting contract’s
force majeure clause seemed so implausible, it was skimmed over by
planners with perhaps the same attention theme-park visitors give
to roller-coaster warnings.
Today, however, many of the nightmares such clauses address
wars, deadly viruses, bankruptcies, weather-related disasters have
become far more imaginable as likely risks. Add continued economic
instability to the mix, and planners are presented with contracts
containing more fear factors than ever before.
While worry-free risk management is impossible, upgrading
previous safeguards to protect against risk will help planners
combat sleepless nights.
COUNT THE DOLLARS
Figure out the financial risk the event absolutely cannot exceed.
For example, a corporate planner in Chicago adds up the value of
her vendor contracts and determines her product launch at a San
Francisco conference center must not exceed $500,000 in
attrition/cancellation and food and beverage risk. If the firm
stands to lose $750,000 in the event the meeting does not go
forward, and there is no room for negotiation, the planner might
need to move the program to a second-tier city where costs are
Calculate the total risk, including out-of-pocket expenses for
airline deposits and direct-mail expenditures that cannot be
recouped in the event of a cancellation. If vendors cannot agree on
this number, do not gamble on a contract with them.
Know the limits of your organization’s insurance, including
worker’s compensation and union regulations. Corporate and
nonprofit limits will vary.
Most hotels carry adequate insurance (but never assume this;
always ask what the policy covers, and ask to see a copy). On the
other hand, many conference centers and off-site venues do not have
their own insurance.
SHARE THE RISK
Planners can and should attempt to transfer as much risk
to vendors as possible, but inevitably risk is shared in some part
between buyer and supplier.
If the company does not have its own legal counsel, consider
hiring an attorney who specializes in event contracts or a
third-party risk assessor/contract expert. This will be well worth
the money invested.
Standard clauses for the employer should be written, updated and
consistently used. Never be shy about insisting on your own
contract or addenda; it is best to use your own language or
RESPECT THE FORCE
The force majeure clause, once a pessimistic dose of legalese, is
now an absolute necessity. Do not assume the standard clause is
going to cover the meeting against all acts of God. If attendees
simply are afraid to travel or a corporation sets its own travel
restrictions, the typical force majeure clause will not ensure
penalty-free cancellations or attrition risk. Be sure everything is
Risk levels affecting meetings can change from moment to
moment, so be sure to keep informed about what’s going on in the
world, even if the event is local.
A thorough checklist should include factors such as weather,
strikes, major economic changes, bankruptcies, mergers, property
management changes, etc.
Try to anticipate changes in your employer’s policies, which
could include possible travel or hiring freezes, or other factors
that might require shifts in program content. Run through this
checklist weekly in the months leading up to the meeting, and tweak
plans as needed.