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by Jonathan T. Howe, Esq. | March 01, 2005

Remember the awful sound of fingernails on a blackboard? Some clauses that show up in meetings contracts and expressions used in negotiations should produce the same effect on planners.
    Too often, however, the use of such clauses and phrases becomes a “gotcha!” game, because today’s busy planners have scant time to scrutinize the proposed contract line by line, or to consider the full meaning of what their hotel counterparts are telling them at the negotiating table. Nevertheless, planners need to recognize not only offending words in contract clauses and negotiations, but also to realize when a change that is detrimental to the planner’s requirements has been made in a familiar clause.
    For example, in the not-so-distant past, contracts said rooms within a block that had not been booked by the cutoff date would revert to the hotel for resale; however, if someone from the group wanted to book a room after the cutoff date, the hotel, on a space-available basis, would provide the room at the group rate.
    In today’s contracts, that clause usually states the group rate will not apply to rooms booked after the cutoff date. Even more troublesome: Some agreements spell out that rooms booked after the cutoff date will not be credited toward attrition and other charges that are calculated by using the group’s pickup.
    That’s not the only disturbing development. Following are other red flags to watch for.

The “we’ll tell you later” clause. This little ambush in a contract takes the form of “our rates today are $X, and sometime in the future we will tell you the rate your group will pay.” Your contract must specify what your exact rates will be. And spell out that no matter the dollar amounts specified in the contract, if a lower rate is found through other channels, your attendees will get it and they will be counted as part of your room block.
    Similarly, with food and beverage, it is better to set a firm dollar amount in the contract, and decide later how you will spend it.

“We reserve the unilateral right to make changes.” Never give a supplier the contracted right to change the rules without your permission. Changes should always require both parties’ consent, which means there will be some more give-and-take. If the hotel wants to reduce the room block because the pickup is light, but the planner insists the block can be met, the planner had better be prepared to pay attrition if the block is not met.
    Worse yet is the contract that allows the hotel to relocate events (such as moving a reception) or change other aspects of the agreement (such as the type of amenities). Don’t give the hotel this power. Require that the property notify you of potential changes, and that you must OK them.

“Don’t bother trying to understand this legalese.” If you don’t understand a clause, ask that it be clarified. Don’t be intimidated if the salesperson tells you, “No one has ever asked about it before,” or “We’ve always done it that way.” Too often, such responses are given because the person on the other side of the table doesn’t understand it, either.

“Don’t worry; we’ll solve that later.” I always worry when someone says “not to worry.” If the issue is key to the integrity of the program or the ability of the supplier to perform, “don’t worry” is no substitute for spelling it out in the contract. While oral representations are OK, written commitments are far better and vital when it comes to enforcing a supplier’s obligations.

Legal questions can be e-mailed to Jonathan Howe ataskhowe@mcmag.com.