Hotel Event Contract Pet Peeves- Part 2

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.

This video covers hotel event contracting pitfalls to avoid such as handwritten changes, dangling counteroffers, and a one-way street clause. Are you making these common event contract pet peeves with your hotel partner?

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:

Hotel Event Contract Pet Peeves- Part 2 

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

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

Lisa: And this is Legalease with the Ladies powered by HopSkip. Today, we're going to talk about Contract Pet Peeves part two. We're going to address things that Barbara and I see commonly in the industry that can cause real legal problems if not addressed and they're very, very easy to fix. The first thing that we need to talk about today is handwritten changes. Barbara and I see this happen all the time where you get a contract that has been signed and in place for years before an event is supposed to take place that has handwritten changes in the margins, lining outs, little things written in, all kinds of things. Maybe a complete page has been crossed through. That should never happen.

It's 2021. We all have the ability to retype and do clean contracts and there is simply no reason to have handwritten changes in the contract. And the reason that you shouldn't do that is that they always cause problems. First of all, you can't always tell if both parties agreed to those handwritten changes. You may see a little scribble next to whatever the changes are but you don't know who's initials those are or if the other party agreed to it. Another thing that happens is that you can't read the change or it's an incomplete sentence. Sometimes, it's inconsistent with other things in the contract. Maybe they change the number of rooms in the room block, but didn't adjust the performance or attrition or cancellation process.

There's simply no reason that you should do this and whenever somebody sends back something to you with handwritten changes, it's very, very important to retype the contract, have a complete and clean contract so that everybody knows what was agreed to and that you haven't overlooked anything that may need to be changed as a result of that handwriting change. Barbara?

Barbara: Yeah, thanks, Lisa. That's definitely a Pet Peeve of mine as well. And often times, it's the person with the worst handwriting that's doing the handwritten changes and of course, they're no longer working with the organization. So, it makes it more difficult. The same is true by the way when you're redlining contracts. Once you redline for purposes of negotiating, make sure both parties have a clean copy. That's really the best practice as well. Let me talk a little bit about so called "Dangling Counter-Offers" (that's my terminology and those of you who remember grammar class in school will remember dangling participles and it occurred to me many years ago in talking about this topic that dangling was a good way to phrase counter offers.)

So, stepping back for just one moment, in order to have a contract, you have to have an offer that's made and that offer has to be accepted by the other side with the mirror image. So, we call that the mirror image rule because it has to look exactly like the offer that's made. And if anything has changed handwriting or otherwise, that's not acceptance, that's a counter-offer. So, just as you think about a ball volleying over the net during a tennis match, it goes back to the party that made the offer to then accept the counter-offer or of course, make another counter-offer back. The reason this is important is that often times in the midst of the negotiation process, parties will forget where they are in that offer/counter-offer acceptance process. And as a result, you can have a counter-offer that was made back which was never acknowledged or accepted by the other party.

So, it's dangling. It's hanging out there. It hasn't been accepted. And you know, the proverbial nine times out of ten, I say that's probably not gonna raise an issue, however when it does in the tenth time it's a real issue. I had a client years ago where this happened too. They changed their room block, they changed their rate, and they signed it and sent it back. They never got acceptance from the hotel, years go by, a new board comes on and says, ‘We don't want to go to that hotel for a meeting, we want you to cancel that contract.’ When they sent the document over to me, I'm looking at it thinking this isn't a contract this is a dangling counter offer.

Now, both parties may have acted as if there was a contract and they talked through the years and there was anticipation that there was a contract there. But the fact of the matter is that there really wasn't and really making sure you close that loop is critical. You don't wanna be the one people are talking about at the water cooler. And Lisa, I keep mindful of my group clients and tell them that it doesn't always benefit the group. It can hurt the group. For example, if the hotel doesn't have room for the group anymore and wants to cancel that so-called contract.

Lisa: Absolutely. It could turn out that there's no contract at all. In which case, either party can walk away without giving anything to the other side. So, keeping these dangling things from dangling, you need to have a process in place. I use my Outlook calendar, I put reminders. When I send something out to be counter signed, I put a reminder on my calendar that comes up and says. ‘Hey, we've gotten that back.’ And Barbara can tell you I do it with her all the time. But another thing you can do that's even simpler is when you have that counter-offer or that amendment, when you send it out, keep a copy of it on your desk. Don't just stick it in the drawer. Because you wanna be reminded that you never got it back, so you can contact the other side and say, ‘Hey, I need to get that back from you and get it signed.’ It's a very important thing to do.

Another thing to think about in contracting is what I call a “One Way Street”. A clause that gives one side the right to do something but doesn't protect the other side as well. From the hotel perspective, it's something that I see a lot in clauses like renovation clauses that say, if there's any renovation anywhere on the property, the customer can cancel without payment. From the hotel side, that's not something they're going to like because of course, the renovation could vary in scope and may or may not really impact the group. So, from the hotel side, they're going to want a clause that says, the parties are going to work together to determine how that impact is going to be on the group and decide whether or not it's appropriate to cancel. Barbara, what are your examples of One-Way Streets?

Barbara: Absolutely, Lisa. You know, when you ever see the words "reserves the right to", circle it and put it in pink neon flashing lights. Because that means that you're giving the other party the right to do something. Whether that be to cancel the contract without liability, whether that be to change the rates, whether that be to reassign the functions fee. Anytime you see a one-way street, ideally, make it a two-way street. So, in other words, it's subject to the party's mutual agreement. And Lisa, the example you gave on construction, I think is a really good one because ideally, the party should have a conversation about that topic, about the construction, about the extent of it and agree to work in good faith to resolve concerns. And only in the instance, if they couldn't agree to resolve those concerns, then that might be a "walk away" situation.

The mutual agreement is really important, Lisa, and I know you work with your clients as well on the hotel side to factor that into the contracts right off the bat.

Lisa: And as Barbara says, one of the things you want to think about is, why is the other side putting this term in? If a hotel puts in a term that says, they reserve the right to change the space, it's so that they can move space around and layer an additional business over a business that they already have. If it's very important to you on the customer side, that you want to know that your space cannot be changed and maybe you're going to need to give back some concessions in order to get that guarantee of the space but again, as Barbara says, it's a discussion.

So, this has been Legalease with the Ladies sponsored by HopSkip. Thank you for joining us today and please leave your comments and suggestions for future topics in the comment section. 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.