Legal Issues, Contracts and Liability

1
Legal Issues, Contracts and Liability

• Chapter 18

2
Objectives

• After completing chapter 18, the reader will be
  able to
• Recognize the basic components of a facility
  contract.
• Discuss legal issues pertaining to meeting
  management, such as liability, insurance and
  confirmation letters.
• Identify legal issues concerning international
  meetings.
• Coordinate proper music licensing for the
  sponsoring organization.

3
Introduction

• An understanding of the basic local, state and
  federal laws that affect meeting implementation
  and meeting attendees is an absolute necessity
  for todays meeting manager. These laws touch
  almost every aspect of a meeting, thereby
  requiring a meeting manager to develop the
  ability to recognize legal issues and to identify
  and take appropriate steps to limit or eliminate
  potential problems.

4
Overview

• Read and Understand
• Often dont until dispute or client asks you a
  question about the clause and you dont know why
  it is in there.
• Often it is somebody elses form and the clause
  that you are using doesnt even pertain to your
  business.
• Good time to reflect (talk to your supervisor or
  legal counsel) and revise or create with mind
  towards resolving most common disputes likely to
  arise (cant cover everything) on your terms.

5
Review and Revise Periodically

• Typos/misspelled words over time (passed down
  word processor to word processor).
• Example proposed contract for a meeting I had
  in March 1998 the room cut off was for March 1
  1997. On September 16, I received a contract
  that showed the price of coffee at 730 am to be
  a 1.75, but at 1000 am the same coffee (now old
  and stale) jumped to 3.50. A phone called
  cleared the situation up.

6
Review and Revise Periodically

• Inconsistent terms will be construed against the
  drafter.
• When your contracts go out sloppy you lose
  credibility with your client and the court.

7
Contract Issues

• LEGAL TIPS YOU ABSOLUTELY MUST UNDERSTAND
• Understand the legal requirements
• of a contract.

8
Contract Issues

• Understand the proper way to Amend a Contract or
  Proposal
• Dont allow oral modification use a clause which
  states that all modifications to the contract
  must be made in writing.
• Identify a person or persons on your staff and
  with the contracting party who are allowed to
  modify the contract on the partys behalf.
• Make sure that all modifications are signed off
  to by both parties.
• If an oral modification is made on site make sure
  the person who is asking for the change is
  authorized to do so.

9
Contract Issues

• Always Define Your Terms
• Make sure the other party understands the terms
  (i.e. guarantees). It is a good idea to have
  them sign off on clauses like the guarantee so
  that they wont come back later and say I didnt
  know about that or I didnt understand.

10
Mutual Objectives Of Every Contract

• Clearly specify prices and rates
• Specify intent and expectations of the parties
  regarding performance
• Establish and list deadlines
• Allocate liability between the parties
• Indemnification clauses

11
Mutual Objectives Of Every Contract

• Specify remedies for breach or default on both
  sides
• Liquidated damages
• Make the contract legally clear, precise and
  inclusive so as to avoid future disputes.

12
Key Clauses for Concern In Catering Contracts

• Liquidated damages/cancellation clauses (also
  slippage and attrition clauses)
• What are liquidated damages?
• When is this type of clause useful?

13
Liquidated Damages

• Liquidated damages are stipulated to in advance
  what amount is going to be paid to you as
  damages if they breach without going to the
  trouble of proving up your actual damages in
  court.

14
Liquidated Damages / Cancellation Clauses??

• These types of clauses are usually used where
  actual damages are otherwise difficult to
  determine with precision (i.e someone cancels a
  certain period before the event). It is
  difficult to determine amount lost in preparation
  and more importantly opportunity costs (foregoing
  booking other business). (continued)

15
Liquidated Damages / Cancellation Clauses??

• If you rely on liquidated damages and the clause
  is determined to be enforceable you can recover
  even if you do not suffer any actual damages
  (i.e. you rebook).
• Is it enforceable?

16
The court looks at

• Parties intent must be clearly expressed
  (reasonable damages not a penalty).
• Amount stipulated cant be out of proportion to
  actual damage (or grossly exceed amount of damage
  reasonably expected to suffer).

17
The court looks at (continued)

• Problemcourts look at the clauses with disfavor
  and if there is any appearance that the amount is
  unfair or excessivethey will likely call it a
  penalty and strike down the liquidated damage
  clause.

18
The court looks at (continued)

• Put in clause language that explains what the
  clause means and what it is for.
• Educate clients so they understand.
• No question to court as to the intent or
  agreement (perhaps have the client sign that
  they understand the clause).

19
Cancellation Clauses????

• Case by case
• Include a windfall b/c amount includes cost
  (which is probably not incurred) and profit.
• Courts dont like them.
• Why have a cancellation clause?
• Deterrent to breach
• Bargaining power

20
???????????

• Indemnification
• Oral modification
• Acts of god etc
• Guarantees
• Changes, additions, and modifications
• Liquor liability
• Americans with disabilities

21
???????????? (continued)

• Ownership
• Duty to mitigate damages
• Termination
• Construction and remodeling
• Service fees versus gratuities

22
Group Discussions

• Attrition and
• Cancellation By the Group