Every so often
we get a call from a client stating that a
current contract is no longer “working.” This generally means that
the meeting planner is facing a small disaster, perhaps as a result
of making reductions in the room block, encountering budget cuts or
other unfortunate circumstances.
The question planners should be asking me is, “Can we
renegotiate?” The answer is yes, you can but don’t expect to have
any clout in the process. Failure to perform (in this instance, by
the meeting planner) is a breach of contract, for which the law
will allow the nonbreaching party (the supplier) to be
So, be prepared to give up something to get what you need. In
most cases, money in some form will be exchanged for
Of course, such contract-related roadblocks are best avoided. To
achieve that, all your agreements should allow you to make changes
as the date of the program approaches. Most attrition clauses, for
instance, don’t allow for realistic re-evaluations as the meeting
date approaches. Insist on it. The contract should set forth review
periods and offer opportunities for reductions or increases to the
block as needed, to be mutually agreed upon by both the planner and
the supplier. These provisions for adjustment help organizations
avoid being assessed outrageous attrition fees.
When dealing with vendor and facility contracts other than hotel
agreements, such as those for outside events, include a provision
stating that you have the opportunity to reduce or cancel, based on
the current status of the program.
For example, contracts for a tour of the host city usually
stipulate that the event will take place depending on the number of
people who sign up, but often the guarantees are made without the
opportunity to adjust the commitment. The same is true for F&B
agreements and other arrangements. Never sign papers that allow the
other party to penalize you without your consent, whether you are
supplier or planner. The key in the ability to change or alter
obligations is to provide “wiggle room,” by which both parties know
up front what flexibility exists within the terms of the agreement.
Once those terms are superseded, neither party should allow the
other unilaterally to make changes.
Other contract areas that might need changing after the
agreement has been signed concern unforeseen circumstances. For
example, a new product launch has been arranged, but the product is
not ready to be shown. Similarly, the contract should be specific
up front. Should a situation like this occur, cancellation or other
changes without liability are OK up to a certain date if they’ve
been written into the contract from the beginning.
CHECK FOR FRESHNESS
Another issue to consider is how old the contract itself is. Too
often, I hear planners say, “It’s worked well for us all these
years. Why change it?”
Boy, if there ever was a trap for the unsuspecting, this is it.
What worked six months or even six weeks ago probably doesn’t work
now. Particularly since Sept. 11, conventional wisdom has changed.
Force majeure clauses are now in fashion. Before that tragic time,
they were inserted in contracts, but no one was really sure why.
Today, the clause is a major item in negotiations.
Just as each meeting or event is unique, contracts should not be
static. They are strategic documents that need to be reviewed
carefully for each program to be sure they fit the needs of the
particular meeting.Jonathan T.
Howe, Esq., is a senior partner in the Chicago 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.
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