Category: Contracts

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

With the continued growth in the size and scope of conferences and trade shows and the trend for organizations to host their conferences and trade shows together, many planners may be finding themselves for the first time having to work with a convention center as a venue rather than holding the conference or trade show at a hotel.

Convention center license agreements are not often “user-friendly” documents to review. Many are quite lengthy and vary from one another.

As most convention centers are owned by governmental or quasi-governmental entities, such as cities, additional constraints, and regulations exist when negotiating such agreements.

While there are a myriad of legal issues surrounding convention center license agreements, the following are my top 6 legal issues to address in convention center license agreements:

1. Confirmation of Space, Dates, Times, and Rates

License agreements should include a detailed summary of the space to be utilized by the organization, including the room names, dates, and times from move-in through move-out. It is important to note that the center may not reassign any of the contracted space without the organization’s prior written consent.

Further, the agreement should also detail the rates for such space. Some centers offer flat fee rates, while others base rates on total square footage. Most offer discounts based on food and beverage expenditures (see 2 below). If the rates are based on total square footage, it is typical to exclude office space and other non-revenue-generating space from such calculations.

2. Exclusive Services

Planners should carefully review which services are exclusive to the center—meaning that those services may only be provided by the center’s vendors. Often, these are safety-related services such as rigging, electrical, and plumbing, but they can also expand into non-safety services such as food and beverage, business center services, computer rentals, and floral.

Planners may find success in negotiating out of exclusives for non-safety services. Note that the organization will need to enter into separate contracts with each vendor. Getting copies of those contracts before signing the convention center license agreement is often helpful.

3. Food and Beverage Minimum/Discounts

Most convention centers offer license fees discounts based on the total amount of food and beverage expenditures, which is an incentive to host food and beverage events at the convention center rather than the hotels.

These provisions are often not clearly written, so planners should take extra care to ensure they fully understand them.

Also, if the group will have sponsors or affiliate groups (“ICWs”) holding food and beverage events at the center, it is important to ensure that any revenue generated by the ICWs is credited toward the group’s total food and beverage expenditure.

4. Insurance

License agreements often contain very detailed insurance requirements that are much different from those required by hotels.

It is important to provide the organization’s insurance broker with a copy of such requirements before the contract is signed to confirm that the organization can meet the requirements.

If not, the organization can try to negotiate changes to these requirements before the contract is signed.

5. Indemnification

While many planners are accustomed to mutual indemnification clauses in hotel contracts, mutual indemnification provisions in convention center license agreements are a rarity.

Often, the centers are restricted from indemnifying the organization due to state or local laws because a governmental or quasi-governmental entity owns the center. Having said that, it is important to always ask that the indemnification clause be made mutual as more and more centers are offering some level of mutual indemnification. Also, it is critical that the organization’s attorney review the indemnification provision, which obligates the organization to indemnify the center.

There are many tricks and traps in such provisions that are important to identify and try to revise, such as “sole” indemnification.

6. Rights of Cancellation

Just as with hotel contracts, there are many reasons why an organization would need to cancel the license agreement.

One reason may be for business reasons – in other words, the organization decides not to host the event. License agreements typically include a sliding scale cancellation fee provision similar to those in hotel contracts. Often, there is no provision that the center re-license the canceled space and, if it does, credit back cancellation fees to the organization, so it is important to ask for such a provision.

It is also important to include the instances in which the organization would need to cancel the license agreement without liability, including force majeure, construction, labor disputes, or unavailability of headquarters hotel(s).

For force majeure, the provision is often one-sided, meaning it only applies if something happens to the convention center—not if the organization or its attendees cannot travel to or use the center. Thus, the provision needs to be mutual and should include a reference to performance being “commercially impracticable” in addition to (or in lieu of) being impossible or illegal.

It is also critical to include a construction clause that requires the center to notify the organization of any planned construction and its plans to ensure there will be no impact on the organization’s meeting. If the parties cannot agree on such plans, the organization should have the right to terminate the license agreement without liability.

Other rights to cancel without liability to address in the license agreement include strikes or labor disputes at the center and the unavailability of the organization’s headquarter hotel(s).

Just as every hotel contract may differ, convention center license agreements are much the same and require careful review by the organization and its legal counsel.

One final note: Many convention centers have very detailed policies and procedures or guidelines for using the building. It is important for the organization to review those along with its decorator to ensure there are no concerns that would impact the conference or trade show.

As always, be careful out there!

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

You have probably heard the saying, “Hope for the best, but plan for the worst.” 

While many meeting and event professionals work hard to anticipate problems that might arise during their meetings and events, the reality is that often, the biggest challenges are those that cannot be anticipated or planned for before the meeting. 

What can planners do to plan for the unexpected challenges? 

The following are four true stories of challenges faced by meeting and event professionals, how they were resolved, and what could have been done to avoid or minimize the problems that ensued.

No Rooms at the Inn

Just three weeks before its annual meeting, the meeting planner for a professional society learns that the luxury brand hotel scheduled to host her group’s meeting will be undergoing exterior renovations. As a result, the hotel will not be able to provide sleeping rooms to the group. 

The hotel proposed to the planner that since it could host the function space, it would transport attendees to and from the hotel by bus to a nearby limited-service hotel. Knowing that the hotel’s proposal was unacceptable, the planner worked to secure rooms and function space in another luxury brand hotel.

Meanwhile, the group advised the original hotel that, due to its inability to provide sleeping rooms as required by the contract, it was in breach of its contract. Thus, all obligations were terminated, and the hotel would be legally responsible for all monetary damages incurred by the group to move its meeting.

Once the alternate hotel was secured, the original hotel was advised of the summary of the monetary damages incurred by the group due to the hotel’s breach. Those damages included the difference in room rates between the original and the alternate hotel, the difference in food and beverage prices between the original and the alternate hotel, costs to notify the attendees of the change in location, costs to update the website, and attorneys fees to review the contract for the alternate hotel.  Documentation of such charges was also provided. After reviewing and discussing the damages, the original hotel accepted the summary and paid the group for its damages.

Although this story has a happy ending, the group could have put itself in a stronger position with the original hotel by including a provision in the contract to address the possibility of the hotel’s cancellation. That provision would include a detailed listing of those categories of items and costs for which the hotel would need to pay monetary damages if it could not provide the rooms or function space required by the contract.

The Speaker and The Scandal

Just three days after entering into a contract with a keynote speaker, a nonprofit organization learned on the national news that the speaker was involved in a scandal that alleged that he had engaged in illegal and unethical behavior. 

Once the group learned of this development, they quickly assessed their options, including canceling the speaker contract. Unfortunately, the contract did not allow the Group to cancel for such reasons; instead, the group would have to pay a cancellation fee. 

After discussing this issue with the speaker’s bureau, the bureau agreed to allow the group to apply its contract and fee toward another speaker. The group accepted this proposal and contracted with another speaker.

While the group was pleased that the speaker bureau understood its concerns and addressed them regardless of what the contract said, the key takeaway from this story is that strong language in the speaker contract should be included regarding the group’s right to cancel due to issues or concerns involving the speaker. 

Typically, in speaker contracts, there is a broad right for the speaker to cancel for reasons such as illness, death of a family member, and even “overriding professional obligations,” but this right is one-sided. By converting these provisions to mutual rights, the group will be better positioned to protect its interests with this important investment.

“Under-departed” and The Snowstorm

How does a snowstorm in the northeast affect a meeting in Florida?  When the attendees from the meeting before are unable to travel back home to the northeast.  That’s just what happened to one group a few years ago.  When it and its attendees arrived in Florida for their meeting, they learned that the hotel was not able to provide their sleeping rooms or function space because the group before did not check out of the hotel as scheduled because they were unable to travel home to the northeast. 

Once alerted to the problem, the hotel secured sleeping rooms at a neighboring hotel and provided function space to the group. Ultimately, the holdovers could travel home, and the group could move its sleeping rooms back to the hotel.

This issue of being oversold — or, as one hotelier put it to me, “underdeparted” — can be a major disruption to a group’s meeting. And yet despite efforts to put strong language into the hotel contracts, these “underdeparted” situations will still arise from time to time and therefore need to be managed from a practical standpoint outside of the contract.

Party of Two for the Ballroom?

Just two weeks before its annual sales meeting, a corporate meeting planner discovered that the ballroom reserved for her company’s general session programs was now reserved for another group and would not be available for her company’s use. 

Although the contract did not state that the hotel could move the group’s function space, the hotel made such change anyway. 

When challenged on this change, the hotel stated that the change was due to the fact that the group would not be using its minimum room block, and therefore, the hotel found another group who would replace revenue at the hotel. 

The alternate space offered by the hotel was inferior in size, location, and amenities. 

While the group continued to challenge the hotel’s right to move its function space, it contacted its decorator about the alternate space and whether it could be made to work for the general sessions. Following such discussions, the group determined that the alternate space would work for the group. 

Now, the negotiations over what the group would receive from the hotel as a result of this change began. 

In addition to paying the group’s additional costs to move the general session (including decor, lighting, and signage), the hotel agreed to waive more than $20,000 in room block attrition fees the group would have been responsible to pay under the contract terms. So, in the end, while not happy about the alternate space, the meeting went from a financial failure to a financial success due in part to the hotel’s change in function space.

There are really two key learning points from this story. 

1. Make sure that hotel and convention center agreements include language which requires the hotel or center to obtain the group’s prior consent to any function space reassignments.
2. When any challenge such as the double-booking of function space occurs, remember that sometimes that challenge can be a good thing.  Often, it gives the group leverage to negotiate concessions which will be financially beneficial to the group.

So, the next time you hear a story from a meeting professional about something going wrong at their meeting, don’t just think that the same thing can’t happen to you — think of what you would do to make sure the problem never arises in the first place.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com

This is a guest post by Barbara Dunn, Attorney & Meeting Industry Expert. This article shall not be considered legal advice. Readers are advised to consult their legal counsel.

Speakers can make or break your organization’s meeting. Yet, while much scrutiny is given to selecting a speaker, not as much is given to reviewing and negotiating the speaker’s contract.

These contracts, whether prepared by the speaker or by the speaker’s representative/agent/speaker’s bureau, are often positioned as “non-negotiable,” but negotiating and reviewing are necessary to ensure that the organization is in a strong position to protect itself and its meeting. Following are several key questions to consider when reviewing a speaker contract (“Contract”).

What is the topic of the presentation?

While this would seem to be an elementary point, the topic is often overlooked or generalized in the Contract. For example, if Susan Speaker is hired to speak on “current trends” for ninety (90) minutes, there is no telling what “current trends” she will be speaking about during her presentation. Instead, the Contract should provide as much detail as possible about the topic and the audience so that the presentation will be on point for the group.

What is the speaker fee and expense arrangement?

This is a much negotiated provision in the Contract yet once an amount is agreed, the Contract should provide that a small payment of the fee is made upon the signing of the Contract with (ideally) the remainder to be paid after the presentation. If more payment is required before the presentation, it is a good strategy to try to hold back some percentage of the fee (say 10%-20%) just in case the presentation does not meet the organization’s requirements.

Also, it is important to “fence in” the speaker’s travel and other related expenses by requiring a particular class of air travel or offering a flat-fee travel stipend. The organization should offer to provide hotel accommodations and ground transportation to ensure such costs remain within its budget.

What event(s) trigger a speaker’s right of cancellation?

This is a key provision to address in the Contract. It is common that in contracts for celebrities or politicians, the speaker has the right to cancel the Contract without liability for “overriding professional obligations”. That is an easy out, and it does not provide protection to the organization. So, while it is common that no payment will be due and no liability will be incurred by either party if the speaker is unable to present due to their death, disability, or other incapacity, it is important to try to remove any other reasons for the speaker’s cancellation.

If the speaker cancels the Contract for any reason, the organization should receive a full refund of all fees paid to the speaker as well as any reimbursement for any refundable travel expenses or travel stipend paid to the speaker. Further, if a speaker’s bureau or agency represents the speaker, the bureau or agency should be responsible for providing the organization with replacement speakers with the same or lower fee. The approval of the replacement speaker, however, should be at the discretion of the organization.

What events trigger an organization’s right of cancellation?

Every contract needs “exits,” including speaker contracts. As such, the Contract should include rights of cancellation without liability for the organization to cancel the Contract without liability. These rights include:

• Breach of Contract by Speaker: Speaker fails to meet the deadlines and deliverables set forth in the Contract.
  
• Speaker Engages in “Bad Behavior” Before the Presentation: If the organization receives credible information that the speaker has engaged in “bad behavior” before the presentation, the organization needs to have the ability in the Contract to cancel without liability. Any behavior which would negatively reflect on the organization’s public image and reputation, be offensive to the organization’s stakeholders, or is otherwise “outside of the character and purpose” of the organization should trigger a right of cancellation without liability.
  
• Organization Makes a Business Decision to Cancel Speaker: The Contract should allow the organization the right to cancel for any reason should it choose to go in a different direction for the presentation. In the case, it is best if the organization tries to limit its exposure when negotiating the cancellation fee amount and the date the cancellation fee is triggered.

What intellectual property rights and representations should be included?

There are many important intellectual property rights that must be addressed in the Contract, including the following:

Organization Wants Recording of Presentation For Future Use

In order for the organization to have the right to record and to use the recording in the future, the organization must obtain the speaker’s consent to do so in the Contract. While the speaker does not need to transfer ownership of the presentation to the organization, the speaker should grant the organization a broad license (permission) to use the recording in any manner it may choose without further payment to speaker. Beware of language in the Contract which refers to use “For Archival Purposes Only” which prohibits the organization from live-streaming the speech and may prohibit the organization from further use of the presentation on its various platforms.

Speaker Uses Infringing Material and/or Makes Defamatory Remarks

The Contract should provide that the speaker has rights to use all of the material in the speaker’s presentation – whether through their ownership of the materials and/or a license (permission) they obtained from the owner of the materials. Further, the Contract should provide that the speaker is not to make derogatory or defamatory remarks in the presentation. In either case, if the speaker does not comply with these provisions and the organization is sued by the owner of the materials or the subject of the defamatory remarks, the speaker must indemnify the organization against any claims, i.e., pay all legal fees and damages awarded against the organization as a result.

Speaker Prohibits Photography or Recording

While the speaker may prohibit the organization from photographing or recording the presentation, beware of contracts that contain a provision that “no attendee shall photograph or record the presentation,” as the organization will not be able to enforce this provision. While it can make announcements to attendees regarding this restriction, there is little way to make sure no photos or recordings are made. A good compromise is to say that the organization will use “reasonable efforts” to ensure that attendees understand the restrictions on photography and recording of the presentation.

While these are just some of the questions to consider when negotiating or reviewing a speaker contract, be sure to thoroughly review and vigorously negotiate the Contract to protect the organization’s interests.

Barbara Dunn is a lawyer and trusted advisor to meeting professionals. With more than three decades of experience, Barbara helps her clients navigate negotiations and finalize effective contracts for their meetings and events. Barbara is the owner of her own law practice, Barbara Dunn Law PLLC, following her tenure as a capital partner at the law firm of Barnes & Thornburg. Barbara can be reached at barbara@barbaradunnlaw.com