Meetings & Conventions: Planner's Portfolio February
The Law & the Planner
BY JONATHAN HOWE
A Handshake Isn’t a Contract
If you have space “on hold,” it may not be there when you
Q: Our annual conference is in its 14th year and was held at the
same hotel in 1996 and 1997. In 1998 and 1999, the property was
under renovation, preventing us from holding our event there.
However, we did have its space on hold for 2000, which was
confirmed to my predecessor by a hotel account manager in April
1997. The manager is no longer with the hotel. When I began my job
this year, I found out the space on hold for us had been given to
another group without prior notification to us. We are now left
without a venue for our conference in 2000 and I must pursue other
options, which is detrimental to the event, as the property is the
only hotel in the area large enough to host us. Do we have any
recourse against the hotel for releasing “space on hold” without
first notifying us? I have the written statement of the official
A: The crux here is this: What does “space on hold” mean, and
what happens when space is sold out from under the meeting
professional? The answer is found in the basics of contract
In order for a valid contract to be in place, several things
must occur. First, there must be an offer and there must be
acceptance by the other party on the same terms and conditions as
pre-sold by the maker of the offer. The maker of the offer controls
the method by which it can be accepted.
When one party says the space is on hold, this is not legally
binding on either party each can walk away without liability. Why?
Because at this point there is no contract. What the hotel did,
without other facts to refute this, was make a statement to induce
the sponsor to hold the meeting there; it did not create a contract
to hold the space.
There are many ways a hotel or supplier can make this offer. It
can say specific dates are “open” or give the sponsor “right of
refusal” or say, “We will hold these dates until...,” etc. What
this really represents is the term for which the offer is open.
If the offer is not accepted within a reasonable period of time,
the offer expires. The key here is that the hotel can withdraw the
offer at any time, even by virtue of choosing a later date. For
example, the “offer” says the dates will be held until May 15, so
accepting after May 15 doesn’t count. Such a response would be a
counteroffer. The hotel can accept the counteroffer if the dates
are still open, reject it or do nothing. Note also that before the
cutoff date, the hotel can withdraw the offer without any liability
because a contract isn’t in effect.
No contract can arise unless the parties have acted within the
agreed upon period for acceptance. Unfortunately for the planner
who inherited this situation, the hotel was free to take the
business, reject it and/or make other arrangements.
Unless a valid contract requires the hotel to honor “space on
hold,” there is no legally binding obligation. Three legal theories
come into play here:
Agreements to make a contract in the future. An
agreement to agree does not create a contract. This merely states
there may be an opportunity in the future for the parties to get
together. If either one of the parties decides not to go forward,
that ends the opportunity.
Statement of intention. Many times people
indicate an “intent” to go forward. “Space on hold” is such a
statement. In no way is the party who makes that statement
obligated to maintain it.
No definite offer in place. Here, saying “space
is on hold” merely means that someone has made a notation in his or
her diary concerning the space. For example, you may have plans to
have lunch with someone and you place it on your calendar. Does
that legally obligate you to have lunch with that person?
Obviously, it does not because it is not a contractual obligation.
In the meantime, someone else might make a better offer.
Having said all this, I must add a business comment. When a
hotel indicates that space is on hold, or a meeting planner
indicates that “we intend to conduct our program at your hotel,”
both parties are obligated to tell the other when circumstances
change. This is not a legal question, but an issue of good business
practice and maybe even of ethics. One of my favorite Ronald Reagan
theorems was “always trust, but always verify.” Here the planner
assumed that the “space on hold” meant a contract was in place.
Jonathan T. Howe, Esq., is
a senior partner in the Chicago and Washington, D.C., law firm of
Howe & Hutton, Ltd., which specializes in meetings, travel and
Do you have a legal question?
E-mail your concern to firstname.lastname@example.org and look for expert advice
in a future edition of this M&C column. We regret all questions
cannot be answered.
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