ADDING CONTINGENCY CLAUSES

Meetings & Conventions: Planner's Portfolio August 1999
August 1999 PLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


ADDING CONTINGENCY CLAUSES

A strong initial agreement helps planners handle surprises

The one constant in the meetings world is the contract. It always will be there, and it always must cover the planner's needs as well as the facility's. It's natural to worry that some detail was missed in all the, well, details. Every meeting professional tries to make contracts as inclusive as possible so no issues will arise after the agreement has been signed. But these agreements often are made more than a year before the event, so anything can happen in the meantime.

Contracts should meet the following goals.
1. Provide the legal framework of the relationship between the parties.
2. Be a road map so that anyone can review and understand exactly what is expected of both parties. This is particularly important if those who sign the document have moved on by the time the event takes place.

Neither goal is simple to accomplish, and no one can foresee every single contingency that may come up. As a result, contingencies can and should be covered in the basic agreement, and some flexibility is needed when issues arise after the contract has been signed.

But what exactly should the planner and supplier do? Try to make it as easy as possible to anticipate things that may occur in the marketplace. For example, encourage the use of a clause allowing the planner to cancel the meeting if the facility is bought or the management company changes.

When properties are sold or reflagged, one of the first things the new ownership or management does is remodel or rehab the property, either sprucing up the public areas or going whole-hog and revamping the entire hotel. In some cases, the property may be shut down completely.

In any case, the planner should make sure the initial contract provides protection from any material interruption or disturbance of the meeting. If the hotel is shut down or there is a potential for material disruption, the contract should specify that the property is obligated to relocate the meeting or to provide accommodations elsewhere at its expense so the attendees are not inconvenienced and the meeting can go forward.

As I dictated this article, one of my clients was meeting in a hotel where renovation work was disrupting the events. After a quick conversation with the general manager, the jackhammers stopped, thanks to a provision in the contract regarding the environmental quality of the meeting. By that I mean the contract specified what noise levels and other environmental occurrences were permitted.

Another contract issue is the deterioration of the property. The agreement should require the facility to maintain the same star or diamond rating as it did at the time of booking, if not better. If the hotel does not have a rating, it should at least retain membership in the same reservations system, such as Leading Hotels of the World or Preferred Hotels.

Many planners avoid surprises later by not specifying room names in contracts. What is called the Jefferson Room today could be the Jackson Suite tomorrow. In this case, a picture or floor plan is worth a thousand words. Number the rooms, and indicate the character of each room and when it is going to be used.

Finally, include a clause in the original contract to require that any material changes be put in writing and signed by both parties. While a written contract generally can be modified by oral agreement, such a clause encourages the parties to get it in writing.

A little anticipation can go a long way. Strong contractual clauses help avoid fights when unforeseen snags threaten an event.

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.