Legal issues


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Legal issues

  1. 1. LEGAL ISSUES 02/26/12
  2. 2. <ul><li>A meeting planner should possess two important skills: </li></ul><ul><li>The art of negotiation and the ability to successfully write a contract that meets the needs of both the organisation sponsoring a meeting, convention or exposition and the host facility. </li></ul>02/26/12
  3. 3. Negotiation <ul><li>Negotiation is the process by which a meeting planner and a hotel representative (or other supplier) reach an agreement on the terms and conditions that will govern their relationship before, during, and after meeting, convention, exposition, or event. </li></ul>02/26/12
  4. 4. Negotiation <ul><li>“ It is bargaining or discussing with a view toward reaching an agreement.” </li></ul><ul><li>(Foster, 1989) </li></ul>02/26/12
  5. 5. Negotiation With Whom? 02/26/12
  6. 6. Steps in Negotiation <ul><li>1.To know the Group. </li></ul><ul><li>2. Information Gathering. </li></ul><ul><li>3. Discuss the specific items that are negotiable. </li></ul><ul><li>4. Signing of the legal documents. </li></ul>02/26/12
  7. 7. 1.To know the Group <ul><li>This shall help the meeting planner in determining his or her objectives for the negotiation of the final contract. </li></ul>02/26/12
  8. 8. 2. Information Gathering. <ul><li>This is when the meeting planner and facility manager find out as much as they can about one another and the organisations they represent. </li></ul><ul><li>The organisation sponsoring the meeting provides their information in the form of the group prospectus. </li></ul><ul><li>The host facility has a meeting planners guide that is provided to the sponsoring organisation. </li></ul>02/26/12
  9. 9. 3. Discuss the specific items that are negotiable. <ul><li>Negotiable items of convention centre: </li></ul><ul><li>Exhibit Hall Rates </li></ul><ul><li>Move-in Costs: negotiate free time for moving in and moving out. </li></ul><ul><li>No. of days for move-in </li></ul><ul><li>Meeting Room Rentals: If a group is renting a substantial amount of exhibit space, perhaps meeting room charges could be reduced or waived. </li></ul>02/26/12
  10. 10. <ul><li>Deposit clauses: If the entire deposit can be waived, so much the better. If this is not possible, the percentage of deposit might be. </li></ul><ul><li>Utilities: while charges for these during a show may not be negotiable, charges for utilities during move-in and move-out may be waived. </li></ul><ul><li>VIP Parking: Ask for free parking for staff and VIPs </li></ul>02/26/12
  11. 11. <ul><li>Room Setups and Resets: Theatre-style set up is free, while other style of set ups may cost. </li></ul><ul><li>Material Storage Fees: while most convention centres will not let exhibitors store materials on the exhibit floor, free use of storage areas may be among the negotiable items. </li></ul>02/26/12
  12. 12. <ul><li>What is negotiable with Hotels ? </li></ul><ul><li>Space </li></ul><ul><li>Room Rates </li></ul><ul><li>Meeting Dates </li></ul><ul><li>Also…. </li></ul><ul><li>Complimentary Room Ratios </li></ul><ul><li>Cutoff Dates </li></ul><ul><li>Rates after cutoff dates </li></ul><ul><li>Attrition or cancellation clauses </li></ul><ul><li>Meeting or exhibit space rental </li></ul>02/26/12
  13. 13. <ul><li>Comp suites </li></ul><ul><li>Staff Rates </li></ul><ul><li>Limo Service </li></ul><ul><li>Audio Visual rates </li></ul><ul><li>VIP Amenities </li></ul><ul><li>Parking Fees </li></ul><ul><li>Food & Beverage Provisions </li></ul>02/26/12
  14. 14. <ul><li>Rack Rates- Published Rates of Hotel Rooms. </li></ul><ul><li>Hotel wants to achieve a total return on its investment. Since nearly 50% of all rooms in all hotels are sold at a discount, hotels vary their actual rates depending upon a number of supply and demand factors, including time of year. </li></ul><ul><li>Most hotels have adopted concept of Yield Management , pioneered by the airline industry. In this approach hotels are able to vary their rates almost daily, depending upon the demand for rooms at a particular time </li></ul>02/26/12
  15. 15. 4. Signing of the legal documents. <ul><li>Once both parties have had ample time to review the contract and their lawyers have done the same, the contract must be signed. </li></ul><ul><li>It is signed by individuals who have the authority to do so. </li></ul>02/26/12
  16. 16. Contract <ul><li>A contract is a legal document that binds two or more parties. </li></ul><ul><li>A contract binds an association or organisation and the host facility. </li></ul><ul><li>All meetings regardless of their size, should have a contract. </li></ul><ul><li>It is a legally binding document, careful consideration must be made to all details to ensure that all possible elements have been included. </li></ul><ul><li>The contract should include all arrangements, obligations, costs and deadlines relevant to the meeting, convention and conference. </li></ul>02/26/12
  17. 17. <ul><li>Acc. To The Meeting Planner’s Legal Handbook (Goldberg,2003) Contract is : </li></ul><ul><li>“ an agreement between two or more persons consisting of a promise or mutual promises which the law will enforce, or the performance of which the law recognizes as a duty.” </li></ul><ul><li>A contract can be termed as: </li></ul><ul><li>An agreement </li></ul><ul><li>A letter of Agreement </li></ul><ul><li>A Memorandum of Understanding </li></ul><ul><li>A letter of intent or proposal </li></ul>02/26/12
  18. 18. <ul><li>Essential Elements of CONTRACT are: </li></ul><ul><li>An offer by one party </li></ul><ul><li>Acceptance of the offer as presented </li></ul><ul><li>Consideration (i.e. price negotiated and paid for the agreement) </li></ul><ul><li>Offers can be terminated prior to acceptance in one of several ways: </li></ul><ul><li>At the expiration of a specified time </li></ul><ul><li>At the expiration of a reasonable time period </li></ul><ul><li>On specific revocation by the offeror </li></ul>02/26/12
  19. 19. <ul><li>A typical event industry contract will contain: </li></ul><ul><li>The names of the contracting parties, their details and their trading names </li></ul><ul><li>Details of the service or product that is offered (eg equipment, entertainment, use of land, expert advice) </li></ul><ul><li>The terms of exchange for such service or product </li></ul><ul><li>The signature of both parties indicating understanding of the terms of exchange and agreement to the conditions of the contract. </li></ul>02/26/12
  20. 20. Contracts required by an event management company 02/26/12
  21. 21. <ul><li>Sponsors </li></ul><ul><li>Contract would cover </li></ul><ul><li>Quality representation of the sponsor such as trademark and signage, exclusivity and the right of refusal for further sponsorship. </li></ul><ul><li>Entertainers </li></ul><ul><li>A common feature of the entertainment contract is rider. </li></ul><ul><li>Rider is an attachment to the contract, usually on a separate piece of paper. </li></ul>02/26/12
  22. 22. <ul><li>The contract often contains a clause requiring the event company to provide goods and services contained in the rider, as well as the performance fee. The rider can include such things as: </li></ul><ul><li>Technical specification : size of PA system required, microphone, technician requirements, lighting etc </li></ul><ul><li>Hospitality specification: food, drink, accommodation for relaxing etc </li></ul><ul><li>Venue specification: payment terms, insurance requirements etc </li></ul>02/26/12
  23. 23. <ul><li>Venue: Contract includes indemnifying the venue against damages, personnel requirements and security staff. Other element included in contract are: </li></ul><ul><li>Security deposit: an amount generally a percentage of the hiring fee. </li></ul><ul><li>Cancellation: outlines the penalty for cancellation </li></ul><ul><li>Access: includes the timing of opening and closing of doors </li></ul><ul><li>Late conclusion: penalty for the event going over time </li></ul>02/26/12
  24. 24. <ul><li>House seats: this is the reserved free tickets for venue management </li></ul><ul><li>Additions or alterations: event may require some changes to the internal structure of the venue </li></ul><ul><li>Signage: this covers signs of any sponsors and other advertising. Venue management approval may be required for all promotional material. </li></ul>02/26/12
  25. 25. <ul><li>Broadcast contract complex due to large amount of money involved in broadcasting and production of related merchandise such as videos, sound recordings. Some important clauses: </li></ul><ul><li>Territory or region- the broadcast area (local, national or international) must be defined. </li></ul><ul><li>Sponsorship: This area can present difficulties when different levels of sponsorship are involved. Sometimes the right of sponsor and broadcaster’s sponsors can clash. </li></ul><ul><li>Repeats, Extracts and sub-licenses </li></ul>02/26/12
  26. 26. Areas /Clauses addressed in a contract pertaining to meeting <ul><li>Terms (Payment Procedures) </li></ul><ul><li>Force Majeur (Act of God) </li></ul><ul><li>Arbitration Clause </li></ul><ul><li>Time is of the Essence </li></ul><ul><li>Insurance </li></ul><ul><li>Hold Harmless and Indemnification Clause </li></ul><ul><li>Entertainment </li></ul><ul><li>Venue </li></ul><ul><li>Accommodation </li></ul><ul><li>Function Space </li></ul><ul><li>Food & Beverage </li></ul><ul><li>Exhibit Space Rental </li></ul><ul><li>Attrition Clause </li></ul><ul><li>Cancellation Clause </li></ul><ul><li>Termination Clause </li></ul>02/26/12
  27. 27. <ul><li>Terms (Payment Procedures): This clause defines how and when the funds will be paid. </li></ul><ul><li>Force Majeur (Act of God): Under this clause both parties agree on which circumstances, deemed to be beyond their control, will permit an event to be cancelled without penalty to either party. </li></ul><ul><li>Arbitration Clause: It is common practice to include this clause that allows both parties to use arbitration in place of a legal judgment when they fail to agree </li></ul>02/26/12
  28. 28. <ul><li>Time is of the Essence: This clause instruct both parties that the agreement is valid only if it is signed within a prescribed period of time. </li></ul><ul><li>Insurance: Type and limits of insurance that must be in force by both parties, as well as requirement that each party coinsure the other. </li></ul><ul><li>Hold Harmless and Indemnification Clause: In the event of negligence by either party, the negligent party agrees to hold the other party harmless and to defend them (indemnify) against harm. </li></ul>02/26/12
  29. 29. Room Block <ul><li>Room Block is the number of rooms held in reserve for a group. </li></ul><ul><li>Rooms refer to sleeping accommodations and include their specifications. </li></ul>02/26/12
  30. 30. Complimentary Accommodations <ul><li>A rule of the thumb in this area is one complimentary guest room for every 50-100 guest rooms booked. </li></ul><ul><li>Walking Guests </li></ul><ul><li>In case of no rooms available for guests that have confirmed reservations then </li></ul><ul><li>The host facility locates another hotel of equal quality and agrees to transport the guest to that hotel. </li></ul><ul><li>The host facility pays for that night’s lodging and for the return of the guest following day. </li></ul>02/26/12
  31. 31. Food & Beverage <ul><li>The contract should address the following: </li></ul><ul><li>Costs </li></ul><ul><li>Taxes </li></ul><ul><li>Gratuities </li></ul><ul><li>Labour Charges </li></ul><ul><li>Corkage Fees </li></ul><ul><li>Date, also specify the notice period the host facility requires concerning exact attendance figures, with 48 hrs being the most guaranteed time limit. </li></ul><ul><li>Type of service required, the no. of servers and the no. of bussers needed for each of the event. </li></ul><ul><li>Additional details for each function- linen colour, centerpieces, decorations. </li></ul>02/26/12
  32. 32. <ul><li>Taxes </li></ul><ul><li>Luxury Tax 12.5% </li></ul><ul><li>Entertainment tax to be paid for ticketed event. </li></ul><ul><li>Gratuities </li></ul><ul><li>Host facilities have different policies concerning gratuities, and meeting planners need to determine how these fees are levied on the organisation or association sponsoring the events. </li></ul>02/26/12
  33. 33. <ul><li>Corkage Fees </li></ul><ul><li>Bringing in food and beverage from outside is known as corkage. </li></ul><ul><li>A corkage fee is levied on these items because some amount of labour is required from the host facility- this labour may be in form of uncorking and serving wine or plating up and serving specialty food items. </li></ul>02/26/12
  34. 34. Exhibit Space Rental <ul><li>Details of booth no., size and cost </li></ul><ul><li>Booth signage </li></ul><ul><li>Special service requirements </li></ul><ul><li>Move-in/move-out dates </li></ul><ul><li>Union requirements </li></ul><ul><li>Rules and regulations imposed by both parties. </li></ul><ul><li>Cost </li></ul>02/26/12
  35. 35. ATTRITION CLAUSE <ul><li>Attrition clauses sometimes also referred to as performance or slippage clauses </li></ul><ul><li>It provide for the payment of damages to the hotel when a meeting sponsor fails to fully utilize the room block specified in the contract </li></ul>02/26/12
  36. 36. Cancellation Clause <ul><li>This is the provision that provides for damages should the meeting be cancelled for reasons other than those specified, either in the same clause or in the termination provision. </li></ul><ul><li>A properly drafted agreement should provide for damages in the event either party (including hotel) cancels without a valid reason. </li></ul><ul><li>The cancellation policy states that the contract may be cancelled by either party when written notice issued by an agreed upon date. </li></ul><ul><li>Once the cancellation date has passed, penalty charges will be assessed. </li></ul>02/26/12
  37. 37. Termination Clause <ul><li>Sometimes called force majeur or Act of God clause. </li></ul><ul><li>This provision permits either party to terminate the contract without damages if fulfillment of the obligations imposed in the agreement are rendered impossible by occurrences outside of the control of either party. </li></ul><ul><li>Force majeure includes strikes, severe weather and transportation difficulties </li></ul>02/26/12
  38. 38. RISK <ul><li>All meetings involve an element of risk. </li></ul><ul><li>Following categories of risks: </li></ul><ul><li>Contractual Risks -those that the planner voluntarily and willingly undertakes by signing an agreement that calls for certain tasks to be performed. </li></ul><ul><li>Operational Risks- those that occurs as a result of conducting a meeting or event. These include such areas as liquor or host liability. </li></ul>02/26/12
  39. 39. <ul><li>Negligent occurrences- things that happen because one party did or did not take a certain action. </li></ul><ul><li>Acts of God- damages that occur due to earthquakes, strikes etc </li></ul>02/26/12
  40. 40. <ul><li>The Event Safety Guide (HSE, 199) identifies FIVE phases where risk can be assessed: </li></ul><ul><li>Build-up: this involves planning the venue design, selection of competent workers, selection of contractors and sub contractors, and construction (of stage, marquees, fencing) </li></ul><ul><li>Load in: this involves planning of the safe delivery and installation of equipment and services which will be used at the event, for eg stage equipments used by performers, lighting and sound systems. </li></ul>02/26/12
  41. 41. <ul><li>Show: this involves planning effective crowd management strategies, transport management strategies and welfare arrangements and planning strategies for dealing with fire, first aid, contigencies and major incidents. </li></ul><ul><li>Load out: this requires planning for the safe removal of equipment and services. </li></ul><ul><li>Breakdown: this includes planning to control risks once the event is over and the infrastructure is being dismantled, including disposal of waste-water and rubbish. </li></ul>02/26/12
  42. 42. Nine Steps of Risk Management <ul><li>STEP 1: Understanding context: consider Event Type, management, stakeholders and general environment </li></ul><ul><li>STEP 2: Identifying Risks- Look for the hazards </li></ul><ul><li>STEP 3: Decision- Decide who might be harmed and how </li></ul><ul><li>STEP 4: Evaluating the Risk and decide whether the existing precautions are adequate or whether more should be done </li></ul>02/26/12
  43. 43. <ul><li>STEP 5: Control- Control problem that may arise </li></ul><ul><li>STEP 6: Mitigating Actions </li></ul><ul><li>STEP 7: Specific Event Risks </li></ul><ul><li>STEP 8: Recording </li></ul><ul><li>STEP 9: Review your assessment and revise it if necessary </li></ul>02/26/12
  44. 44. Management of Risk <ul><li>The planner decides that conducting a risky endeavor is simply not worth the benefit that might accrue. </li></ul><ul><li>The risk can be transferred to another party involved in the transaction. </li></ul><ul><li>Risk can be insured. </li></ul>02/26/12
  45. 45. Permission Required for holding an Event <ul><li>Police Permission </li></ul><ul><li>Deputy Commissioner of Police of the area </li></ul><ul><li>Traffic Police </li></ul><ul><li>Ambulance </li></ul><ul><li>Fire Brigade </li></ul><ul><li>Municipal Corporation (of the city in which event is organised) </li></ul>02/26/12
  46. 46. Permission Required for holding an Event <ul><li>Entertainment Tax- It is necessary to pay entertainment tax for a ticketed event. If no sale of ticket is there, a NOC from the collector is to be obtained. </li></ul><ul><li>Entertainment tax is levied on the following events: </li></ul><ul><li>Movies </li></ul><ul><li>Cabret Dances, Belly Dances </li></ul><ul><li>Western Music or Dance show </li></ul><ul><li>Fashion Show </li></ul><ul><li>Foreign Artist Show </li></ul><ul><li>Awards, Pageants etc </li></ul>02/26/12
  47. 47. Permission Required for holding an Event <ul><li>Events which do not attract entertainment tax: </li></ul><ul><li>Drama </li></ul><ul><li>Hindi orchestra or variety programme </li></ul><ul><li>Traditional Music or Dance </li></ul><ul><li>Mimicry </li></ul><ul><li>Kavi Sammelans, Bhajans, Qawwalis, Mushairah </li></ul>02/26/12
  48. 48. <ul><li>Phonographic Performance License- Subject to the Copyright Act of 1957, it is mandatory for all those who play Pre-recorded music in the form of Gramophone Records, Music cassettes or CDs or Radio or Audio-visual in public places to take prior licence from the Copyright Society for Sound Recordings namely Phonographic Performance Limited (PPL). </li></ul>02/26/12