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Contracts 101: The Contract Negotiation Hall of Shame

Legal expert Joshua Grimes says thinking like a lawyer can help you prepare for the unexpected.

Never make assumptions about what the contract means and what’s covered. Too often, people don’t want to read the contract properly and assume their lawyers can fix it later. 

Of the times that I’ve been asked to get involved when attrition damages are due because the group didn’t meet its block, I would say about 80 percent of the time the damages amount that is being assessed for attrition was not accurately determined according to the contract. And one time, after a company cancelled a meeting at a high-end resort and was charged $700,000 in cancellation damages, the company’s chief counsel all but admitted he had never really read the contract before signing. He did not expect the meeting to be cancelled, but the company had changed CEOs and the new chief decided the meeting was a little too extravagant to look good. The company made too many assumptions without reading the contract they signed: first, that their circumstances would not change and second, that they could just cancel without penalty.

One of the reasons why people don’t read and understand contracts is the language can be hard to understand. Always ask for a contract to be written in plain English, and if the meeting is abroad and your interpreter doesn’t understand the language, ask for clarification. If the language says, for example, the group agrees to comply with section XYZ of the Patriot Act. Well, what does that actually mean? Read the Act and find out if the group is able to comply. Other times there are complex insurance or privacy provisions; make sure that all your stakeholders can meet them. 

Really look at what you are being asked to sign before you agree and be familiar with the terms so both sides can be in compliance. One time a group didn’t realize it had to provide an insurance certificate at a particular pre-conference date. You don’t want to scramble at the last minute. 

Sometimes planners are thrown when they have to put down a deposit to reserve a date at a nontraditional venue, like a theater, before they have a signed contract. Never hand over any money until you have a contract, unless it is totally refundable. For better or worse, not everyone in the events industry thinks like a lawyer. Probably for better! 

LESSONS LEARNED

• Don’t make assumptions!

• Read and understand your contract before signing.

• Don’t send money without a contract. 

More cautionary tales to keep you out of the Negotiation Hall of Shame. 

 

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