Who Is the Responsible Party?

Important points about liability, from expenses to bodily harm

Take Note
• Read your contract with an eye to what additional liability you might be assuming for actions outside your responsibilities.

• Individual responsibility is a linchpin. If you are at fault, you should be the one who pays.

• If a clause you've never seen before shows up in a contract, investigate it thoroughly. Ideally, have a lawyer take a look at it to make sure your group won't become responsible for actions you can't control.

• Remember: Contracts assign risk and reward.

One basic purpose of a contract is to assign responsibilities to the parties involved. Essentially, this means making a list of actions that are supposed to take place -- or could take place -- and putting in writing who will handle each of the actions. Thus, if a problem crops up during a meeting, whether in the meeting room, a guest room, the bar, the lobby, right outside the door or when it's time to settle up, the contract covers everyone's roles. The following are some examples.

Financial matters
Starting with the money, all paragraphs relating to the master account must be specific. Spell out who has the authority to add charges to the master, and note that signatures (which must be readable) are required on all such purchases. Too often, someone charges something to the master, and the hotel staff member does not want to offend by calling it into question. If the contract solidly states that the organization will only honor charges from authorized personnel, and the charge is unauthorized, the host won't be responsible for that purchase.

One clause that is sneaking into contracts says that if an attendee or attending company sponsors a hospitality suite under the aegis of the host organization, the host takes on the obligation to meet the cost of that suite and any attendant liability, such as liquor, that might arise during its use. Don't accept that clause.

Indemnification in short
Indemnification clauses basically say that if I get sued for something that you did or did not do, you will "indemnify" me against any cost or loss I incur. Anytime you face a "one way" indemnification clause, delete it (unless of course it runs to you!).
However, if a problem arises and you don't have the clause in the contract, disputes as to who is responsible could arise -- and then the respective insurance companies will fight it out.

Often, venues owned or operated by a government entity, such as a convention center or hotel that is owned or leased from the city or state, will refuse to indemnify your group and will require you to indemnify or protect them. This is based on the doctrine of sovereign immunity: "The king can do no wrong." In this case, the governmental entity is king. The exception is when a law allows claims against the entity.

Attendee actions
Who's responsible if a lamp is smashed in a room, a physical altercation takes place involving an attendee or one of your guests makes off with hotel property?
Lately we are seeing some venue contracts making the event host responsible for any damage or liability committed by an attendee. Don't allow that. Make sure your contract spells out that issues of liability for an individual remain, appropriately, with the individual.

Jonathan T. Howe, Esq., is a senior partner of the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. Email questions to him at [email protected]