Contracts

"Now therefore this agreement witnesses that in consideration of the mutual covenants and agreements herein contained and the sum of One Dollar ($1.00) of lawful money of Canada and other good and valuable consideration paid by each of the parties to each of the other parties hereto (the receipt and sufficiency of which is hereby acknowledged), it is agreed between the parties as follows:"

WHAT IS A CONTRACT?

CONTRACT =   Intention + Promises + Offer +  Acceptance

General Rules

• Nothing in life, including contracts, has to be fair

• Breach  = Liability for Damages

• Damages = Profit 

 Profit  NOT   Revenue

• Liquidated damages cannot be excessive

• Penalties are not allowed

• Duty to mitigate

GOOD CANCELLATION CLAUSE

If  XYZ Association cancels the booking, the following cancellation fee applies:

• No cancellation fee for cancellations prior to 365 days from arrival;

• 91- 364 days from arrival date - 50% of the room revenue on peak night

• 31-90 days from arrival date - 75% of the room revenue on peak night

• 0-30 days from arrival date - 90% of the room revenue on peak night

In the event of cancellation by XYZ Association, the hotel agrees to extend best  efforts to re-sell the space in whole or in part.  Any revenue obtained from such resale shall be applied to reduce the cancellation fee otherwise payable by XYZ Association

ELEMENTS OF A GOOD CANCELLATION CLAUSE

• Defines cancellation

• Establishes sliding scale to calculate compensation

• Establishes how lost revenue is calculated

• Includes duty to mitigate

Does not require cancellation fee to be payable prior to the date of the event.

DETERMINE WHAT YOU CAN LIVE WITH

• If you can get everything noted in the previous cancellation – you are a hero

• You must consider what you can live with … what is a nice to have, not must have

• There needs to be some give and take in all negotiations.

TERMINATION = FORCE MAJEURE = HOLD HARMLESS

OTHER REASONS

•Bankruptcy of hotel

•If Convention Centre can’t provide suitable facilities (you may include a clause stating hotel  agreement is null and void)

•If facility not in same or better condition than when booked

•If resort facilities are not available

ATTRITION

• Attrition clauses are usually included for both bedroom pick up and for food and beverage

• Also known as “slippage”

GUEST ROOM ATTRITION

Contract clause:

• The Hotel is relying on XYZ Association use of the total room nights agreed to in this Agreement.  XYZ Association agrees that a loss will be incurred by us should there be a reduction greater than 15% of the total room nights actually used.

• Should the room nights actually used by XYZ Association be less than 85% of the total room nights agreed, XYZ Association agrees to pay, as liquidated damages and not as a penalty, the difference between 85% of the total room nights and the actual usage of rooms, multiplied by the average group rate plus 13% HST

Potential Changes: 

The Hotel is relying on XYZ Association use of the total room nights agreed to in this Agreement.  XYZ Association agrees that a loss will be incurred by us should there be a reduction greater than “15%  (attempt to increase to 20%)”  of the total room nights actually used.

Should the room nights actually used by XYZ Association be less than “85% change to 80%” of the total room nights agreed, XYZ Association agrees to pay, as liquidated damages and not as a penalty, the difference between “85% change to 80%” of the total room nights and the actual usage of rooms, multiplied by the average group rate  (change this to standard room rate… if you do average 5 suites can definitely skew the total) plus 13% HST

Add:  (obligation to mitigate)

The hotel will use best efforts  to resell space in whole or in part and any revenue  will be deducted from the amount  owing by XYZ Association.

FOOD & BEVERAGE ATTRITION

Contract clause:

• The Hotel is relying on XYZ Association for the agreed F&B and room rental revenues outlined in this agreement.  XYZ Association agrees that a loss will be incurred by us should there be a reduction greater than 15% of the agreed revenue.

Should  XYZ Association be less than 85% of the total value of the food and beverage agreed, XYZ Association agrees to pay, as liquidated damages and not as a penalty, the difference between 85% of the food and beverage revenue and the actual food and beverage served, plus  18% gratuity and 13% HST
Agreed F&B revenues are calculated by multiplying the  number of attendees by the lowest retail price for our meeting package ($80.00  person)

Potential Changes:
The Hotel is relying on XYZ Association for the agreed F&B and room rental revenues outlined in this agreement.  XYZ Association agrees that a loss will be incurred by us should there be a reduction greater than 15% of the agreed revenue. Again try to increase to 20%

• Should  XYZ Association be less than 85% of the total value of the food and beverage agreed, XYZ Association agrees to pay, as liquidated damages and not as a penalty, the difference between 85% of the food and beverage revenue and the actual food and beverage served, plus  18% gratuity and 13% HST

• Again change to 80%

• And again add the obligation to mitigate which may be more difficult in this situation

Agreed F&B revenues are calculated by multiplying the  number of attendees by the lowest retail price for our meeting package ($80.00  person)

There is nothing you can really do with this!

DAMAGES

FACILITY PROPERTY

BAD

• The group accepts responsibility for any damage to the hotel premises caused by the group members or independent contractors employed by the group.

BETTER

• The group accepts responsibility for any damage beyond reasonable wear and tear  ..caused by the employees or independent contractors of the group provided that such damage is not in any way caused or contributed to by any act or omission of the employees, agents or representatives of the hotel.

YOUR PROPERTY

BAD

• The hotel is not responsible for any loss, damage or injury sustained.

BETTER

• The hotel is not responsible for any loss damage or injury sustained except where such loss or injury has been caused or contributed to by any act or omission of the hotel, its employees, agents or representatives.

SPEAKER CONTRACTS

Considerations in a speaker contract

• Payment of Fee

• Venue Requirements

• Travel & Expense Receipts

• Reproduction/Promotion Approvals

• Speaker Replacement and  cancellation