CONTRACT BASICS FOR INDEPENDENTS

Meetings & Conventions: Planner's Portfolio October 2000 Current Issue
October 2000 PLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.

CONTRACT BASICS FOR INDEPENDENTS

Don’t be outsmarted when you work as a third party; put everything in writing

In recent years, the independent-planner sector of the meetings industry has shown the greatest growth. If you have recently made the leap into this sector from an association or corporate position, or if you are thinking about doing so, here are a few important considerations. Many independent planners commonly encounter problems in two areas: getting paid and determining how much control they have over the event they are planning. These issues, along with a few other critical points, need to be spelled out precisely in the contract.

ASSUME NOTHING
The contract serves as a blueprint of the independent planner’s relationship with her client. It will define authority, what is expected of the planner, and how and when she will be paid. Here are the essentials for independent contractors’ agreements.

The parties. Define each of them clearly.

State the obvious. The contract should declare that you or your firm is an independent contractor.

Add a job description. Make sure the contract says what is to be accomplished, but not how it is to be done. The goal should be well defined, and the planner should have the freedom to achieve it her way.

Define the compensation. Here it is preferable to arrange a set fee instead of an hourly rate. An hourly wage gives the impression that the hiring company has control over the time you will be working for it, and you can be viewed as an employee as opposed to an independent contractor. Include a payment schedule.

Some independent planners are paid through a commission from the hotel that hosts the meeting. If you have arranged to be paid this way, make sure language to that effect is in both the contract with your client and the contract with the hotel.

State cancellation terms. Spell them out, indicating how you will be compensated for work that is already completed. It is imperative that independent contractors have provisions to protect their rights in the event of a cancellation by the client.

Take responsibility. An independent contractor is not an employee of the hiring organization. Therefore, the contract should state that you or your firm will be responsible for all taxes, worker’s compensation, unemployment insurance coverage, etc., relating to you and your employees.

Share responsibility. Generally, an organization that hires an independent contractor is not liable or responsible for his errors or omissions. In other words, if the independent contractor messes up, he is on his own. Having said that, however, in most situations where legal action is taken, both the hiring party and the independent will be sued. It is important, then, to tackle the issue of liability within your contract.

Protect yourself as much as possible by including a provision that the hiring organization will indemnify you for any errors or omissions that might create liability for you, and that you will be named as a co-insured party on general liability and other insurance policies. Indicate that you must be notified if the insurance lapses or is canceled.

Question authority. The contract should define how much authority you will have. Items should include the maximum dollar amounts you are able to negotiate in contracts before the client organization has to be asked for approval. Also, spell out how much leeway you will have in hiring subcontractors, such as production companies and caterers. Your clients might want some form of veto power over subcontractors you choose on their behalf.

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 [email protected].