would you sign this contract?

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Would YOU Sign This Contract? Presented by Tyra Hilliard, PhD, Esq., CMP

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Interactive presentation about hotel and meetings contracts given at Meeting Professionals International World Education Congress, July 2013.

TRANSCRIPT

Page 1: Would YOU Sign This Contract?

Would YOU Sign This Contract?

Presented by Tyra Hilliard, PhD, Esq., CMP

Page 2: Would YOU Sign This Contract?

Disclaimer

This session is for educational purposes only. What is discussed in this session does not constitute legal advice, nor does any client-attorney privilege or confidentiality attach regarding issues discussed, publicly or privately in relation to this session.

In other words, I’m not your lawyer.

Page 3: Would YOU Sign This Contract?

Housekeeping

• Be aware of emergency exits

• Noisy gadgets on quiet

• Please ask questions, give answers, make suggestions – any time! But don’t hog the floor.

• If you have an elaborate question or scenario that is specific to you or your organization, ask afterwards.

• I encourage Tweeters to tweet (@DrTyra)

• Slip out if you need to.

• If this is not for you, don’t feel like you “should” stay.

Page 4: Would YOU Sign This Contract?

Clauses

Performance•Attrition•Cancellation•Force majeure

Financial Risk•Surcharges and fees

Liability•Indemnification & Hold Harmless•Data Privacy

Quiet enjoyment•Conflicting Groups

Legalese•Assignment•Waiver & Severability

Page 5: Would YOU Sign This Contract?

Thank you!

Page 6: Would YOU Sign This Contract?

Attrition

“Group agrees that if Group uses fewer room nights than the room block established in this agreement, Hotel will be harmed.”

“Group will be required to pay for each unused room night in the Group’s contracted room block at 75% of the confirmed group rate plus tax.”

“The parties agree that this is a liquidated damages clause and not a penalty.”

Page 7: Would YOU Sign This Contract?

A Few Words Make a Difference…

Return to Clauses

Page 8: Would YOU Sign This Contract?

Cancellation

“If Group cancels, Group agrees to pay Hotel $100,000 within 10 days of notice of cancellation. If Hotel cancels, Hotel agrees to pay Group $100,000 within 10 days of notice of cancellation.”

*Assume $100,000 is a reasonable estimation of hotel’s damages if meeting is cancelled.

Page 9: Would YOU Sign This Contract?

Cancellation

Page 10: Would YOU Sign This Contract?

Better…

“…calculated by multiplying the negotiated single group room rate by the number of rooms in the contracted block at the time of cancellation, less allowable slippage and comps and multiplying by 75% profit margin. Group will have no liability for unused rooms in the Group room block that are resold by Hotel or that remain unavailable for sale over any of Group’s meeting dates.”

Page 11: Would YOU Sign This Contract?

Recent Event Cancellations

No Mo Mo Show

The Motivation Show canceled plans for May 2014 event in Chicago

GSA Fallout

2013 GSA Training and Expo conference (3,000 attendees & 3,000 exhibitors) canceled for May 2013 in Orlando

Page 12: Would YOU Sign This Contract?

And Add “Cancellation by Hotel”

If the Hotel cancels this contract, Hotel agrees to pay Group for the costs associated with relocating the event. These costs include, but are not limited to, printing and postage, costs associated with selection of an alternate site including site selection fees, attendee notifications, advertising and travel expenses of speakers or meeting participants, differences in room and catering costs, and other reasonably related costs and expenses associated with rescheduling the meeting.

Return to Clauses

Page 13: Would YOU Sign This Contract?

Force Majeure

“The parties' performance under this agreement is subject to acts of God, war, government regulation, terrorism, disaster, strikes, civil disorder, curtailment of transportation facilities, or any other emergency beyond the parties' control, making it impossible or illegal for Hotel to host the meeting in the facility.”

Page 14: Would YOU Sign This Contract?

Make sure “reciprocal” really is…

“The parties' performance under this agreement, in whole or in part, is subject to acts of God, war, government regulation, terrorism, disaster, strikes, civil disorder, curtailment of transportation facilities, or any other emergency beyond the parties' control, making it impossible, illegal, or commercially impracticable for Group to hold the meeting or for Hotel to host the meeting in the facility.”

Page 15: Would YOU Sign This Contract?

Force Majeure Affects Both Parties

Ambulatory Surgery Center Association

After Boston Marathon bombing, the Hynes Convention Center didn’t open until midnight. Show organizers had to work through the night for a show that opened Wednesday at 6:00 p.m.

Return to Clauses

Page 16: Would YOU Sign This Contract?

Surcharges & Fees

“Catering prices are subject to service charge, which is currently 18% and sales tax which is currently 10%.”

“Group and its guests are subject to surcharges and fees in effect at the time of the meeting.”

Page 17: Would YOU Sign This Contract?

What’s next…?• $50 Early check-in fee• $10 mini-bar restocking fee• $40/day resort fee (fitness center, pool, etc.)• $12/day “utility surcharge”• $1.50 “safe warranty fee”• $2/bag “luggage holding fee”• Tiered WiFi

Hotels are expected to earn US$2 billion in surcharges and fees in 2013.

Page 18: Would YOU Sign This Contract?

Surcharges & Fees

“Catering prices are subject to service charge, which is currently 18% and sales tax which is currently 10%. Hotel agrees to honor current surcharge for Group’s meeting dates. No additional fees or surcharges will be levied. ”

“Group and its guests are subject to surcharges and fees in effect at the time of the meeting. Neither Group nor its attendees will be responsible for any surcharges or fees not enumerated in this contract or agreed to upon check-in.”

Return to Clauses

Page 19: Would YOU Sign This Contract?

Indemnification & Hold Harmless

“Group agrees to indemnify, defend, and hold harmless Hotel from and against any liability arising from the actions or failures to act by Group, its attendees, exhibitors, staff, directors, or members.

Hotel agrees to indemnify and hold harmless Group from and against any liability arising from the sole negligence of the Hotel.”

Page 20: Would YOU Sign This Contract?

Indemnification & Hold Harmless

Page 21: Would YOU Sign This Contract?

Indemnification & Hold Harmless

Return to Clauses

Page 22: Would YOU Sign This Contract?

Data Privacy

“Group warrants and represents that it has give notice to and obtained consent from attendees for the transfer of personally identifiable information between Hotel and Group. Group accepts sole responsibility for this requirement.”

Page 23: Would YOU Sign This Contract?

Data Privacy

Personally Identifiable Information (PII)•Any information that distinguishes one person from another•Not just SSN or credit card•Address•Company•State statutes•Civil liability or individual lawsuits

Return to Clauses

Page 24: Would YOU Sign This Contract?

Conflicting Groups

Suggested language to add:

“Hotel agrees not to book a conflicting or incompatible group over substantially the same meeting dates as Group. For purposes of this contract, “conflicting or incompatible” shall mean…

“Should Hotel choose to book a conflicting or incompatible group, the terms of the Cancellation by Hotel clause shall apply.”

Return to Clauses

Page 25: Would YOU Sign This Contract?

Assignment

“Hotel reserves the right to assign Group contract in the event of a change in the hotel ownership or management prior to the scheduled meeting.”

Page 26: Would YOU Sign This Contract?

Assignment

Return to Clauses

Page 27: Would YOU Sign This Contract?

Flag Change, Reservation Canceled

• Made a reservation at Comfort Inn• Flag changed to Holiday Inn Express• Reservation canceled. • Guest was told she can pay twice as much for a new

reservation…at the same hotel.

Page 28: Would YOU Sign This Contract?

Waiver & Severability

“If one party agrees to waive its right to enforce any term of this Agreement, that party does not waive its right to enforce such term at any other time or to enforce any or all other terms of this Agreement.

“If any provision of the Agreement is unenforceable under applicable law, the remaining provisions shall continue in full force and effect.”

Return to Clauses