DELEGATING LEGAL LIABILITY

Meetings & Conventions: Planner's Portfolio May 2000
May 2000 PLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


DELEGATING LEGAL LIABILITY

Indemnification clauses protect meeting sponsors from others’ negligence

An audiovisual company forgets to tape down a cord. A speaker trips over the cord, breaking her ankle. When she sues all the parties involved (facility, A/V company, meeting sponsor), who pays the lawyer and the damages?

If the contract has an indemnification clause, a contract paragraph stating all parties agree to be responsible for their own actions and negligence, the A/V firm would be required to hire a lawyer to defend the meeting sponsor and to pay any damages awarded against the sponsor.

Hotel and third-party contracts should include a general, mutual indemnification clause dealing with all issues involving the contract, basically saying suppliers are responsible for their own actions and the meeting staff is responsible for theirs. Here is a clause you can adapt to your needs.

The parties each shall indemnify, defend and hold and save the other, their respective successors, assigns, officers, directors, employees and agents, their heirs, administrators and executors and each of them (collectively “the indemnified party”) harmless from any and all actions and causes of actions, claims, demands, liabilities, losses, judgments, damages or expenses, of whatsoever kind and nature, including interest and attorneys’ fees and all other reasonable costs, expenses and charges that the indemnified party shall or may at any time, subsequent to the date of the Agreement, sustain or incur, or become subject to by reason of any claim or claims for any reason resulting from carrying out or failing to carry out the terms and conditions of this Agreement, or the negligence, gross negligence, intentional misconduct or criminal acts or omissions resulting from the action or inaction of the other party, provided that the indemnified party notifies within a reasonable time the other of such adverse claims, or threatened or actual lawsuits. Each party, as appropriate, shall provide complete cooperation to the other, its attorneys and agents.

To go one step further, some planners add an indemnification clause covering failure to comply with the requirements of the Americans With Disability Act. Another provision can cover liquor liability, in case the hotel or the vendor fails to meet basic standards for serving alcohol.

I feel only the mutual indemnification clause is really needed. Clauses covering liquor liability or the ADA become superfluous if you have a basic provision dealing with all other provisions of the contract; however, the obligations of the parties concerning ADA and alcohol still should be spelled out.

Independent planners, who would not have the resources to defend all parties if legal action were brought, should get both the sponsoring organization and the supplier to indemnify them. Be sure to name the sponsoring organization and your planning company in the clause.

WORDS TO LIVE BY
Keep an eye out for two key words. First, be sure “defend” is in the clause. If someone sues all parties, this requires the negligent one to hire a lawyer on behalf of everyone and to pay the lawyer at the outset. Absent this, you might have to wait until the claim is resolved to seek reimbursement from the negligent party for legal fees.

Second, avoid the word “sole,” as in “sole negligence.” Liability is assigned by courts on a percentage basis to the various defendants, so no one party is solely responsible. This word puts a higher requirement on the circumstances of the indemnification. The supplier would have to be the only party at fault in order for the clause to kick in.

With indemnification, as with other contract clauses, be sure it covers your own specific needs.