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by By Jonathan T. Howe, Esq. | March 01, 2010

Here are some important questions I didn't have time to address during a recent M&C webcast on writing and revising contracts. (Go to mcmag.com/webcasts to view the presentation free of charge.)

RATE REDUCTIONSQ. How realistic is it to build language into a hotel contract that allows for rate reductions in the event that the agreed-on rate becomes out of whack with a worsened economy? Does that leave the door open to higher rates in an improved economy?

A. The planner should negotiate a "most-favored-nation" clause. That is, whatever is the best group rate available before, during and immediately after the event should be available to the planner. Of course, the hotel might want to have a corollary stating that, should the going rate be higher than what was contracted, the hotel will be able to obtain a higher rate.

Note that while hotels do sometimes agree to the most-favored-nation clause, planners rarely allow wording that permits their rate to rise.

Also, have a realistic provision in the contract specifying review dates, providing the opportunity to adjust the numbers to be competitive and to maximize the number of heads in beds for the property.

Furthermore, the agreement should state that if it can be shown that a person paying less than the group rate is in the hotel because of the planner's program, that room will be credited to the block. Remember, the hotel reduces rates only in order to obtain maximum occupancy.


GUEST PRIVACY
Q. Most hotels refuse to give me information on nonfolio room service, spa and bar spending by my group. They say it's illegal or an invasion of privacy. Is that so?

A. Case law has indicated that there is no reasonable expectation that a person is entitled to privacy upon renting a hotel room. A guest's belongings and activities are, however, private within the room so long as they are legal. When asking for nonfolio items that were charged to a room, you are not asking for the specific items that were bought; rather, you are looking for a composite dollar amount for each category.

Event history is a very important part of the negotiation process. Planners should specify which details will be provided as a condition before paying the final bill. Composite data in no way diminishes the alleged privacy of an individual.

YOURS VS. THEIRS
Q. Do you recommend using your own standard contract rather than the hotel's?

A. Many organizations today have their own standard hotel contracts. Remember that a form contract is designed to protect the interest of the person offering the form. No one has ever seen a landlord give a tenant a lease that favors the tenant.

While I have worked with both hotels and planners in the development of form contracts, it is important to know what is negotiable and what is absolutely necessary to have in the document. Many times, the battle of the forms leads to a problem in what actually has been agreed to by the parties.

I would suggest that you submit your form contract, just as the hotel will submit its form contract to you. The key to success, regardless of the form, is making sure the final document reflects the needs of both parties and the obligations and rights each has under the circumstances.

My basic rule always has been that if a detail is important to the integrity of the meeting, be sure it is included in the final agreement. Don't be afraid to use your own form, but be afraid of becoming so tied to it that you are unable to negotiate in a fair and proper manner.