Skift Take
There was a time when contracts were written loosely and deals were sealed with a handshake. But those days are over. The industry now relies heavily on detailed written contract terms.
Andrea Doyle
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Your event is going smoothly and you’ve already paid thousands of dollars to caterers and other suppliers, but then your final installment never comes through. That’s when you need a solid contract.
“We always say the events industry is a relationship industry, but we also need to protect ourselves, and we do that through contracts,” says Jill Blood, vice president, associate general counsel and chief privacy officer. Maritz“We write contracts assuming the worst case scenario.”
Brad says 80% of the contract can be the same from event to event, but you’ll want specific details about deposits, payment terms, and deliverables. “Make sure you’ve detailed and prepared the exact work you’ll be doing before you start. I know that’s easier said than done, with so many meetings planned on tight timelines, but I always say you don’t sign a contract when everything goes perfectly, you sign a contract when it doesn’t go as planned,” Brad says. “If there’s a dispute over whether you performed well or not, having details in the contract will help both parties,” she adds.
Keep your contract up to date
Contracts will need to evolve depending on the current environment. For example, staffing continues to be an issue; therefore, staffing should be addressed in the contract if it is consistent with the success and execution of the event. Contracts can also include expectations of specific services or service levels. Minimum staffing levels can be included in the contract, especially for high profile events that require check-in. Some contracts may also include standards for specific housekeeping services.
Force majeure and COVID-19 clauses have been among the most important and most frequently negotiated clauses in event contracts over the past few years. “More recently, we’ve seen a rise in attention to clauses around DE&I, sustainability, AI, etc.,” says Blood. “These constant evolutions can be a challenge for events that are planned with an eye to the future, so building flexibility into long-term contracts is beneficial.”
The U.S. Court of Appeals recently Domination New provisions regarding force majeure clauses have come into force, allowing contracts to be terminated due to the possibility that performance of the contract may become impossible. These clauses now apply at the time of termination, and not at the time the event occurs.
This can have a significant impact on your event. For example, if a conference is scheduled in a tropical location and a weather forecast a week from now predicts a hurricane will make landfall on the date of the event, your group may be able to claim force majeure cancellation, even if the hurricane changes course and blue skies prevail on the scheduled day of the event.
Win-win negotiations
Gary Murakami, Vice President of Global Sales and Industry Relations Teneo Hospitality Grouphas negotiated thousands of contracts in his career. “It all comes down to how you start the conversation. To negotiate effectively, you need to understand the business and your customer’s needs in order to mitigate risk, avoid pitfalls, and deliver the best outcome for both sides,” he says.
He shared three things to keep in mind when negotiating a contract.
- relationship “This is our business and we are not adversaries. We want to create and execute memorable programs that meet our customers’ requests so that they will come back to visit us again,” Murakami said.
- fact – It’s important to understand what is most important, what you’re flexible about, and what is non-negotiable.
- Flexibility Murakami emphasizes the importance of good communication between the two parties to enable a flexible approach.
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