Today’s organizations can purchase technology or tech services to handle many aspects of their meetings, including programs to determine booth layout for a trade show, online registration, one-stop shopping for travel reservations and full-blown meetings management.
These technology providers are third-party suppliers, and planners should expect to enter into a comprehensive contract with them. Certain limitations and parameters must be taken into consideration to afford proper protection to your organization as well as to set forth the “rules of engagement.”
What I’m really saying is that you should scrutinize a software/service contract as carefully as you would a hotel contract. While most third parties will submit their contracts to you with the hope you won’t tinker with it, my advice is to read and tinker.
With all contracts there is a simple rule of thumb that I follow in the first reading. I adopt the journalist’s basics of discovering the who, what, when, where, why and how of the agreement.
In the reading, it is imperative that you get a thorough understanding of what the provider expects from your organization. All third-party agreements also should include a comprehensive “job description” of what you will get from the provider.
Certain caveats also need to be heeded. Carefully read the terms and conditions for cancellation and for the failure of either party to perform, including the resulting consequences. These might be liquidated damages, or they can be based on a set fee for reducing or otherwise changing the basic performance terms of the contract.
Carefully review the method of dispute resolution. Does the contract outline the jurisdiction and the venue where a claim will be resolved? This can be important if, for instance, you are based on the East Coast and the agreement says the laws of the supplier’s home state of California will apply and Los Angeles is the only venue where you can bring a claim.
Also make sure you thoroughly understand any other items that might be incorporated into the contract but are not part of the body of the agreement. If the contract refers to terms set down elsewhere, such as on the supplier’s website, do not sign until you have read and are comfortable with those terms.
For example, it is not uncommon to see contractual provisions referring to other “standard terms and conditions” that you must learn about from another organization or on a website. Make a copy of that information and include it with the contract, incorporating it as of a specific date to avoid the possibility of being trapped by subsequent changes.
Many agreements also contain a provision that disputes will be settled in accordance with the Commercial Rules of Arbitration of the American Arbitration Association. That is an “incorporation by reference,” and most planners -- and suppliers, for that matter -- have no clue what those rules of arbitration are.
Yes, small print exists in agreements and can become a very serious issue. There is a reason it is in small print: The other party doesn’t want you to read it.
While most companies live on their reputations, others might not be forthright in all of the matters that are included within the contract, playing “hide and seek” with incorporation by reference.
Read contracts carefully, understand them and be sure you know exactly what you are signing.
Jonathan T. Howe, Esq.,is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at firstname.lastname@example.org.