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Legal Learning: Thwarting Trips, Traps and Troubles in Hotel Contra. Lisa Sommer Devlin. Do’s and Don’ts. Don’t have contract and addendum; Do make sure both parties have copy of signed agreement; Document changes in writing signed by both parties; Don’t assume “mutual” is always better;
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Legal Learning: Thwarting Trips, Traps and Troubles in Hotel Contra • Lisa Sommer Devlin
Do’s and Don’ts • Don’t have contract and addendum; • Do make sure both parties have copy of signed agreement; • Document changes in writing signed by both parties; • Don’t assume “mutual” is always better; • Don’t assume that because you have “always done it that way” or “the other hotel agreed” that it is correct.
What motivates contract clauses? • Clauses are usually added or changed in response to a bad experience a party has had. • Biggest issue: • Many times the clause does not solve the problem! • Typical clause allows group to cancel, but is rarely the best outcome.
How do you know if your clause is appropriate? • The “Hit by a Bus” rule: • Would anybody who reads the clause understand and apply it the same way?
Key Considerations: • What is the problem you are concerned about? • What do you want to have happen if it occurs? • Does your clause reach that result?
Rate Protection • Is it legally required? • NO! • What is problem you are trying to address and what is the solution?
What to do? • If rate protection is key, make sure you occupy most of hotel • Require that lower rate be shut off, not that lower rate given to your group • Require attendees to reserve in the block
Competitors • Resort shall not reserve any meeting, function or hospitality space over the blocked dates without the prior written consent of the Group.
What are the problems? • Not going to happen • Hotel has to control space • Doesn’t protect from individual competitors • Doesn’t provide remedies
What to do? • Name competitors • Be largest group in hotel • Require meeting to address issues • Security • Moving space
Confidentiality • All information provided by group to hotel will be considered strictly confidential, including all personally identifiable information about group’s attendees. Hotel will be responsible for keeping all such information confidential and will indemnify group for all damages incurred as a result of any disclosure of information. Hotel will purge its system of all PII regarding group’s attendees at the conclusion of the event.
What are the problems? • Hotel doesn’t need or want confidential info to host event • PII belongs to hotel once guest provides it • Puts undo risk on hotel • Does not protect group
What to do? • Keep staff out of room during discussions • Have shredder in room • Have AV staff return information • Have hall monitors-extra security • Educate attendees
Resale/Mitigation • Hotel shall use its best efforts to resell any cancelled rooms and will credit such resold rooms to group. After damages are paid, hotel will credit the damages to a rebooked event.
What are the problems? • Law does not require mitigation in liquidated damages • Must have formula for how resale is calculated • Understand result you are asking hotel to accept—it is fair?
What to do? • Reduce amount of damages owed based on negotiation of estimated resale • If must have resale, must have formula: last rooms resold; credit at group rate vs. ADR; credit at same % as damages paid • Consider rebook or resale but not both • % of rebook credit • Limits on time/size
What to do? • Be proactive • Hotel and group work together • Require attendees to book in the official block.
Third Party Beneficiary • Person not a party to contract that is granted benefits by contract • Has enforceable rights • Meeting planners! • Cannot change/eliminate third party without agreement!
Thanks for Coming! • Lisa Sommer Devlin Devlin Law Firm, P.C. www.devlinfirm.com Lisa@Devlinfirm.com
