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event planning and contract negotiation: important legal terms

Event Planning And Venue Contract Negotiations: What Do All These Legal Terms Mean?

In our last two posts, we covered all of the elements of a venue contract and what you can negotiate.  The next stage in reviewing a contract is understanding the legal terminology and clauses you SHOULD include in the contract.

After all of these years, I still find contracts somewhat daunting, as some contracts are incredibly lengthy with tons of “legalese.”

Here is a list of key clauses you should understand before signing on the dotted line:

Attrition: Also known as “Slippage”: This clause informs you of payment for damages, whether it be a sleeping room block or food & beverage. The venue has a minimum amount of revenue they need guaranteed from your event, and the attrition is that minimum.

Cut-Off Date:  This date specifies when the facility will no longer hold sleeping rooms at the contracted group rate. After that date, unused rooms are released back to the venue’s inventory for resale to the general public. Note: You should include a clause stating that rooms will be available to your attendees after this date if rooms are still available.

Cancellation:  This clause lists the penalties that will apply if you cancel your event. Double check the non-refundable deposit, and note the sliding scale, which typically begins based on date of signed contract and continues in increments of # of days out prior to the event.

Force Majeure: Also known as the “Acts of God Clause”: This clause releases both parties from liability in the event of an occurrence out of their control.

Indemnification:  Also known as “Hold Harmless”: This clause stipulates that neither party will hold the other party responsible or any damages, theft of materials, or equipment owned or rented by either party. It also guarantees that one party will take responsibility for damages assessed as the result of another party’s inaction.

Damages, Insurance and Liability:  This stipulates the procedures, penalties and rights of the party causing damage to the facility. Liability insurance coverage is required up to a specified amount that can vary anywhere from $1M to $3M. The venue will request that you obtain, maintain and provide proof of insurance coverage to ensure any liabilities are covered.

Walk policy:  Action taken by the hotel if they over book your sleeping room block. The hotel would be required to relocate this guest to another hotel after all options are exhausted.

Uninterrupted Use of Premises:  This protects you from any changes with respect to ownership, condition of the hotel, renovation or construction to the property.  If this is not in your contract – MAKE SURE THIS CLAUSE IS ADDED!

Outside vendors:  This clause may or may not be in your contract. If it is, you want to be sure you can bring an outside vendor at no cost. You want the best production value for your event and if you are limited in who you can partner with, it can be detrimental to your event.

If and when possible, always have a legal expert review the document. One does NOT want any surprises.

Do you have any additional points for all of us event planners out there to consider?