Nearly six years ago, in May 2000, this column addressed essential contract clauses. Since then, a number of events and circumstances have occurred that require the topic to be revisited. Precautions and language have been updated to keep in step with the times.
In the wake of 9/11 and hurricanes such as Katrina and Rita, the force majeure clause has become more crucial than ever. The clause should outline the steps the selected facility will take (including emergency medical attention and evacuation) in the event of a disaster, whether natural or man-made.
UNAVAILABILITY OF FACILITIES
Agreements for citywide events must include a clause that states the contract is expressly contingent upon the availability of the convention center and all hotels and suppliers (all parties must be named individually in the document) contracted by the event sponsor. It also should stipulate that if any of these facilities become unavailable, the sponsor can cancel the contract without liability.
Contracts must specify the responsibilities of both the facility and the sponsor for meeting the requirements of the Americans With Disabilities Act. Refer to www.ada.gov for specifics, as well as for updates to this federal legislation.
Cancellation clauses should set forth obligations, such as dollar amounts, without the need to resort to litigation or arbitration, in the event one of the parties cancels. The clause also should address the circumstances under which the planner may cancel.
This clause requires either side to lessen potential damages. For example, the hotel might be required to make a “best effort” to resell unused rooms from the contracted block.
Attrition is no longer predictable, and the attrition clause is more important than ever before. Without one, the planner’s organization could be fully responsible for all rooms blocked.
CONDITION OF PREMISES
The property is required to be in the same condition or better than it was at the time the contract was signed, and to maintain its current rating by a specified rating service.
If you want to use binding arbitration (especially recommended for offshore meetings), add a clause that spells out the requirement of arbitration, the procedural rules, how to select an arbitrator and where the arbitration is to be held.
If any issue requires an attorney’s involvement, include a clause that states the prevailing party is entitled to recover its attorney’s fees. This clause also should spell out what fees are recoverable and whether interest can be collected on the contested amount.
Specify that both parties agree to defend, indemnify and hold harmless one another in the event of a claim registered by a third party.
If alcohol will be served, require the provider to indemnify, defend and hold harmless the sponsor of the meeting in the event of any liquor liability claim. Also, require servers to be properly trained in alcohol awareness and intervention procedures, to demand age verification at their discretion and refuse to serve anyone who appears to be intoxicated.