I hear it all the time, and I shudder: A meeting planner boasts that she never uses contracts for her events. What is she thinking?
When there’s no agreement, what rights do you have, and what responsibilities do you have toward the venue or supplier? Answer: No contract, no deal. You thought you had 300 rooms blocked or two large meeting rooms reserved, but without a contract, the hotel has no obligation whatsoever to fulfill your request.
A planner without a written agreement is at the mercy of the venue: Either you walk in with your attendees to find the space available, or you find you’ve been erased from the books with no recourse or remedy.
A similar and equally disturbing problem occurs when the planner thinks he has a contract with the property but actually doesn’t.
For example, the planner receives the proposed contract from the director of sales. In reviewing it, the planner makes some changes, such as the date, an increase or decrease in the number of room nights, or maybe even the rate. He properly initials the changes and sends them back to the hotel, then hears nothing further from the facility and assumes the contract has been accepted.
What the planner has done is make a counteroffer. Until and unless the hotel accepts the changes, there is no contract.
Another fantasy: The contract proposal comes back stating the hotel will hold the room block open until a certain date. One day after that date, the planner realizes he has not responded to the proposal. There is nothing objectionable in the offer, and the planner immediately signs and returns the agreement to the hotel. Again, no contract. If the offer is not accepted by the drop-dead date, the signed contract returned by the planner is, again, merely a counteroffer.
These rules are the basics of contract law. Any time a material change is made to an offer, it then becomes a counteroffer. Any time a deadline is specified, a response sent after that date becomes a counteroffer.
It is imperative that any counteroffer be acknowledged and accepted by the other party before it becomes binding.
BALL IN WHOSE COURT?
Another maxim: The maker of an offer controls the method by which it can be accepted.
For example, if you need to sign the proposed contract and return it with a deposit of $10,000, failure to send the $10,000 along with the signed contract means you have not accepted the terms. Again, what you have done is to send a counteroffer.
Sometimes in this scenario, both parties go forward and meet their obligations as if there were a contract. If, under these circumstances, a dispute arises, the court or arbitrator might look at the relationship between the parties over the years or at the communications concerning the event in dispute. In considering past dealings, the court’s decision might conclude an “implied contract” was, in fact, in effect. Or it might not.
One of the first things I do when a client says, “I have a contract,” is review the entire situation. Too often, that “contract” is actually an incomplete negotiation.
Without exception, always make sure both parties have duly acknowledged and accepted all changes to the contract in order for it to be a truly legal and enforceable document.