Event Contract Pet Peeves- Part 1

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

In this video, you'll learn if you're making these common event contract pet peeves with your hotel partner? This video covers hotel event contracting pitfalls to avoid such as, failing to use consistent terms throughout your event contract, addenda vs. addendum, and sloppy drafting.

Check out what Barbara Dunn (Partner at Barnes & Thornburg LLP, representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) have to say in Legalease With the Ladies- powered by HopSkip!

Video Transcript:

Event Contract Pet Peeves- Part 1 

Barbara: Hi, I'm Barbara Dunn. I'm an attorney that represents group clients.

Lisa: Hi, I'm Lisa Sommer Devlin, an attorney that represents hotels and resorts.

Barbara: And together, we're Legalease with the Ladies sponsored by HopSkip. Welcome, thank you for joining us today to talk about one of my favorites, not so favorite topics, Contract Pet Peeves. We'll talk about some key contracting principles and these aren't just look pretty changes or these aren't just the ordinary changes that bother you. These are really changes which have legal impact if you don't get them right. So, the first thing I have in terms of my list, Lisa is when contracts do not use consistent terms throughout the document. So, for example, it may reference the group name at the beginning of the contract and use in parenthesis the term ‘Group’ and yet, through the contract, you've got terms like the group's full name, as well as the group's acronym, maybe it's patron, lots of different things.

So, at the end of the day, you've really got this mesh of terminology which isn't consistent. Same is true on the hotel side, really focusing on hotel, how it's defined, again, whether it's resort, etcetera. The consistency really matters because believe it or not, there are disputes that may come up in which case, it may be unclear who the group was if you didn't use that term group in that provision. So, Lisa, that's one of the things I do when I first look at a contract is go through the terminology. Make sure the terms are synced up, and make sure the document is called, whatever the parties wanna call it. That is agreement or contract and that that term is used consistently throughout the document. Lisa?

Lisa: Barbara, that's great advice and I wholeheartedly agree. The next pet peeve that we'd like to talk about is using a contract and an addenda. This is very common in the industry and Barbara and I agree that this is something that is not a good idea. Much because of that reason that Barbara just described, you have inconsistencies created. What often happens is the hotel has its contract form and then the customer has what it calls its addenda that it wants to attach on the back. And usually that addenda is a complete contract in and of itself with completely inconsistent terms with what the hotel contract is. That's not good for anybody.

First of all, addenda is not the right use of that word. An addenda is something you attach to a contract to clarify a term that was not clear in the original contract. For example, a contract to sell 100 bicycles. You neglect in the contract to indicate with colors are, so you would do an addenda to say that you have 50 red and 50 blue bicycles. It doesn't change the contract; it just clarifies something. That's not what these contracts and addenda are that we see in the meeting industry. They're completely different document and it's common that the addenda will say that if there's any inconsistency, it will control over the main contract but that's not necessarily true.

Sometimes, the contract terms and the addenda terms could be read together and create confusion. Sometimes, it cannot clarify which one would control over the other. So, our recommendation is that instead of having two separate contracts that you stick together, what you should do is sit down and negotiate one complete contract that includes the clauses that each party can live with. You're going to find that in the end, you're going to have a much better deal and it will be much easier to make sure the parties understand what each side's obligations are. Barbara, why don't you talk about sloppy drafting and other issues that you see?

Barbara: Yeah, Lisa, thank you and the other, I think the terminology, sloppy drafting, we've sometimes used the term lazy drafting. Lisa gave a great example of two documents that are sandwiched together don't necessarily make a really good sandwich. Our goal should be the one clean document, one clean contract. Whether that starts with your paper so to speak on the group side or whether it's the hotel's paper on the hotel side, at the end of the day, we're really looking for that one clean contract. Clean really means terminology, consistency of terms as I've mentioned, and making sure everything syncs up.

A really good example here would be a circumstance where the group room block might be defined on page one of the contracts. And then over on the page 5, the attrition fees, it uses the terminology minimum group room block. Yet, it's not clear what that term means. And Lisa, I found a lot of times groups run into situations when they amend their contracts to lower the group room block and yet, that amendment doesn't translate into the terms of the contract. In other words, does that mean to the cancellation fee schedule? What does that mean to the attrition fees? So, it's really important to take the time and I know it's difficult today in rush society and maybe not really proofing things. But it really does make a difference and you would be surprised. Again, one word makes a difference. So, Lisa, I think from your standpoint as well, that syncing error comes up a lot.

Lisa: The syncing error does come up a lot and another term you need to know is, as Barbara pointed out, when you are changing an existing contract, it's an amendment. It's not an addenda. It's an amendment and when you amend your contract, it's really important as Barbara says for that consistency to go through and think about every aspect of that contract is being changed as a result of what you're doing. Whether you're increasing your room block, reducing your room block, whatever it might be, you need to go through the rest of the contract and say, ‘How is this impacted my obligation for food and beverage? How is this impacted my obligation for cancellation.’

I think we've seen a lot with COVID-19 is that many events are being rebooked at a later date and the parties neglect to change the cancellation scale that's in the contract with the applicable dates of when different amounts are due. So, those are good examples of how important it is to have consistency and how to make sure that you review everything to make sure you have a complete document.

Barbara: Yeah, thanks, Lisa and I often say if we get to the second or third amendment, we're probably needing a new contract. Because that clean contract so to speak is not clean and it makes it more difficult to follow which obviously is the point of it. Thanks so much for joining us for Contracting Pet Peeves Part One sponsored by our good friends at HopSkip. Please leave your suggested topics in the comment section below. Thank you.

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.