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Intentional Interference with Contract

Intentional Interference in Hotel Contracts & Understanding Your Legal Obligations

In this video, you’ll learn the concept of intentional interference with a contract, and how to avoid any claims that you have intentionally interfered with your hotel contract.

Experts

Barbara Dunn

(representing Groups)

Partner at Barnes & Thornburg, LLP

Lisa Sommer Devlin

(representing Hotels)

Devlin Law Firm, P.C.

Overview

  • One concern that often arises after a hotel contract is signed is the possibility that another party (not the group or the hotel) will intentionally interfere with the contract.
  • To claim intentional interference with the contract, the other party must first be aware of the contract in place and then take some action to “interfere” with that contract.
    • For example: if another hotel offers the group lower rates over the contracted dates to lure the group to cancel the existing contract and to sign a new contract with it, such action would be considered intentional interference with the contract.

Group Perspective

  • If a Group wants to switch years of a hotel contract in order to accommodate another hotel, it should first seek consent from the hotel to do so.
    • For example, if the Group wants to move its 2023 meeting at a hotel to 2024 so that it can sign a new contract (or amend an existing contract) to place the 2023 meeting at a new hotel, it should seek permission to do so from the hotel which has the contract for Group’s 2023 meeting.

Hotel Perspective

  • Hotels understand that groups do not want to cancel existing commitments until they know that they have an alternate venue available, but because of the potential liability, they will not do anything to induce the group to cancel its existing contract.
  • Groups sometimes approach hotel B and say, “We are contracted at hotel A for 2023, but would like to move to your hotel. Would you be interested?” Hotel B should decline to make a proposal until group and hotel A have reached an agreement on ending the commitment for 2023.
  • If Hotel B makes an offer to contract with the group for 2023, and then the group cancels hotel A to move the event, hotel B may be liable to hotel A for loss of the business.