WHEN TRADE SHOWS ARE CO-OWNED

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

The Law & the Planner

By Jonathan T. Howe, Esq.

WHEN TRADE SHOWS ARE CO-OWNED

The more specific the agreement, the better the relationship will be

Q: I am drawing up a contract for a consortium of three groups for a joint trade show. It is the first time they are doing this. Is there a standard cancellation clause I can use for this agreement?

Renee Abrams
President
Renee Abrams & Associates
Pittsburgh, Pa.

A: When it comes to co-sponsoring trade shows, whether through a joint venture, endorsements or shared ownership, there are many issues to consider beyond cancellation.

Most co-owned trade shows that run aground have greed and avarice in part to blame. Whether the partners are for-profit organizations, nonprofits or a mix of both, the division of profits and responsibilities becomes the major concern.

Successful co-owned trade shows clearly establish a firm set of rules governing how the game will be played. From the outset, a solid agreement, delineating the responsibilities of all the parties and what opportunities they might have, is the key to success. Co-owned trade show contracts should be viewed like prenuptial agreements. In addition to issues concerning the relationship, duties and opportunities, it should deal with what will happen if disaster or "divorce" strikes. At a minimum, the agreement should include the following.

A definition of who the parties are and what their responsibilities will be.

A full description of how budgets will be prepared, with the requirement that all owners must approve the budgets.

A provision establishing a policy for full owner approval of basic contract terms, such as cancellation of third-party agreements. (Third-party contracts should be reviewed by legal counsel for the trade show.)

The establishment of an oversight committee or policy board that will act as a board of directors for the operation of the trade show. This group should not be micromanaging, but it should have the authority to approve budgets, evaluate costs and fees, and evaluate performances.

This board or committee should have oversight responsibility for monitoring show results and establishing policy.

One of the owners also may be the trade show manager. This -- like legal counsel for one of the owners being the attorney for the show -- could cause difficulties. But if there is a well-defined management agreement with oversight by the committee or board and realistic benchmarks for evaluation, problems can be minimized. It should be understood up front what those responsibilities are and what that cost will be. That co-owner not only will have the opportunity to receive a distribution from show profits, it will receive management fees for purposes of conducting the show.

The agreement should describe what happens in case of cancellation and liability. Whatever cancellation policy is agreed upon must be uniform across all aspects of the show, including vendor contracts. It is key to all show owners that the cancellation clause include specifics about the financial responsibility each group will bear, what notice is required if one of the owners wants to get out, and the right for the remaining owners to conduct the show without the other party. As each case will have its own dynamics, there cannot be a standard clause.

Having been involved during the past several months in many trade show litigations, I stress that a thorough understanding of what each of the parties brings to the table is key to avoiding going to court. Plan now for a perfect union, but work to ensure an amicable dissolution should irreconcilable differences arise.

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].