Meeting contract liability issues


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Meeting contract liability issues

  1. 1. Joe Boggins, CAE, Attorney, Icenogle & Sullivan Paula Rigling, CMP, President, Meeting Planning Professionals
  2. 2. Contracting Do’s:  Always include in a contract the correct name of the organization (not a d/b/a)  Always include your title in the signature line  Make sure you are signing the contract in a Representative Capacity
  3. 3. Contracting Do’s: Add this language to contracts for additional individual protection: “Under no circumstances will there be any individual responsibility by a staff member or officer of the association for payments under this or related contracts or credit application.” Meetings often include more than one written hotel agreement, for example, for food and beverages. The language quoted above would take care of incorrectly signing an ancillary contract.
  4. 4. Direct Billing Credit Applications In a related manner, many direct billing credit applications include a line such as “I/We agree to be financially responsible . . .” You’ll want to delete that line from the application before and make sure you are signing it in a representative capacity.
  5. 5. For Meetings Dependent on Using the Convention Center If you are using a hotel and the convention center, you will want to add in a clause that releases you from the hotel contract should the convention center become unavailable for your conference. And state the address of the convention center in case a new one is built elsewhere.
  6. 6. Go for Reciprocity The cancellation damage formula should always apply to both parties. Proving damages is often difficult. Make sure the damage schedule applies to both parties.
  7. 7. Force Majeure A meeting planner can’t always anticipate the variety of bad things that can happen. Therefore, include in the Force Majeure paragraph in addition to Acts of God, etc. the word “impracticable” or the phrase “commercially not feasible to hold the meeting.” If a hurricane veers away from Corpus Christi a couple of days before the anticipated landfall, it would no longer literally be impossible to hold the event, but an exec can’t wait until the last minute to cancel.
  8. 8. Liability insurance policies are intended to cover common law liability, that is, to protect the organization from negligent acts of employees that cause harm when the employee is acting within the scope of that person’s employment and sometimes also for agents acting on behalf of the association.
  9. 9. Many hotel and convention center meeting contracts impose liability on the organization for the negligent damage caused by, for example, registrants and exhibitors. A common insurance policy exclusion is for contractually assumed liability, that is, for non common law liability. If you sign the contract with this provision, your insurance policy won’t cover you in case of a claim if this exclusion is in your policy.
  10. 10. A special type of liability insurance called Contractually Assumed Liability Insurance is available. When in doubt whether the association is covered because of any contractual provision, send a copy of the agreement to your insurance agent or broker and ask whether there is coverage.
  11. 11. Subrogation Your insurance company could choose to sue a third party to recover the amount of a claim they paid if the loss was caused by that third party. This is called subrogation. Many facility contracts require you to waive your right of subrogation (and therefore your insurance company's rights) against them in the event of a claim. By waiving the right of subrogation, you may be invalidating your insurance coverage. Subrogation should never be waived without the written permission of the association’s liability insurance company.
  12. 12. Contract Clauses to Include  To avoid the embarrassment and bad P.R. of a member being able to get a lower hotel rate online than the association is offering, specify in the contract that with certain exceptions, such as airline crews, your group will be charged the lowest rate available.  To avoid disruption to the meeting from construction, include a provision requiring that the association be notified if this is to happen and alternative space be made available or the work will not take place during the association event.
  13. 13.  If as is typical, a hotel room rate includes a rebate, say a few dollars for the association to pay for buses, for instance, be sure to make a general statement to that effect in registration publicity and include a comment to contact the association for details if desired. Class action lawsuits have been filed based on undisclosed fees.
  14. 14. Ask the Attorney  How should a planner respond to a contract clause asking the group to indemnify the hotel against any “claim of liability for personal injury” resulting from a food allergy reaction which has not been previously disclosed BY THE GROUP to the hotel.  What if the attendee hasn’t disclosed their allergy to the organization in advance?