Lisa Sommer Devlin is a Phoenix-based attorney who has practiced hospitality law for the past 25 years. She drafts standardized contracts and provides legal representation for large hotel groups, including Hilton, Marriott and Starwood.
On Dec. 8 she presented a Smart Meetings webinar that gave listeners the low down on contract negotiations. The webinar was sponsored by New York, New York Hotel & Casino in Las Vegas. To hear an archived transcript of the presentation, click here.
Ms. Sommer Devlin did not have the opportunity to answer all the questions posed from the audience during the webinar. She provides answers to the additional questions below.
Q: What is the biggest mistake people make in contracts?
A: Two things are a tie for worst: having handwritten changes in a contract, and using a contract and an “addendum” or “rider.” Both are examples of lazy contracting that lead to confusion, mistakes and interpretation issues. Negotiate one complete contract using terms that the parties negotiate and agree upon from the contract and the addendum as appropriate, rather than having one cancellation clause in the contract and a different one in the addendum, as an example. If there are any last minute changes, take the minute or two necessary to retype the provision to make sure that the change is complete, accurate and does not have any undefined terms or ambiguities. That is far better than making a handwritten change that is often illegible, incomplete and containing undefined terms, and it is not possible to tell if both parties accepted it
Q: What is the difference between an addendum and an amendment?
A: Great question, as people use these terms incorrectly all the time in the meeting industry. An addendum is really something added to clarify a contract after it is signed, not a complete contract in itself as is so often seen in event contracts. For example, if you contract to purchase 50 bicycles, an addendum would be used to clarify that 20 will be red, 20 will be blue and 10 will be green. An amendment is a change to an existing contract. For example, the original agreement reserved 500 room nights and it is amended to make the room block 600 room nights. Remember if you amend one part of a contract to address any other parts of the contract that would be impacted as a result. For example, how does increasing/decreasing the block impact the meeting space, concessions, attrition or cancellation obligations?
Q: How are new practices like communicating by text impacting contracts?
A: Technology always advances far faster than the law. In general, you can’t use text messages or emails to create or amend a contract. There are some exceptions, but they are limited. A PDF attached to an email can be used to create a contract. I know it is convenient to text, but I do not recommend relying on it for important communications.
Q: Housing pirates are a big problem for my group. How do I stop third parties from trying to sell rooms to my attendees, especially the ones that are a total scam?
A: Education of your attendees and good room block management and housing processes are the best defense against pirates. First, figure out why your attendees may be tempted by pirates. If your housing procedure will not guarantee the attendee a particular hotel or will not guarantee that groups of people coming together will be in the same hotel, that may make those people want to reserve outside of official housing. More and more groups are requiring attendees to use official housing and book as part of the official block in order to attend the meeting, or incentivizing attendees to do so. These steps reduce or eliminates the ability for pirates to tempt your attendees. Make booking within the block just a cost of participating in the event, just like the payment of registration fees to reduce attendee’s ability so shop for lower rates outside the official block. Also, educate your attendees about the fact that there may be third parties soliciting them that are not sanctioned by your event. Avoid using words like “scam” or “fraud” as you may open yourself up to claims by the pirates, but warn them that such third parties may or may not be legitimate.
Q: In light of the Paris terrorist attacks and ISIS supposedly making threats against the US, some attendees are scared to travel. Does that constitute a force majeure?
A: No. Generally, fear of anything is not a force majeure. It is unfortunate that in our world there is always a threat of terrorism, and if fear of it allowed parties to cancel contracts without payment, no contract would ever be enforceable. While people may feel fear of terrorism more acutely after something like the Paris attacks, it does not mean that it is illegal or impossible for travel to take place. Reduced attendance can occur for many reasons, which is why most event contracts allocate which party will bear that loss in the attrition clause.