On March 15, 2016, Lisa Sommer Devlin of Devlin Law Firm P.C. presented a webinar entitled “Problem Contract Clauses and How to Avoid Them.” The Arizona-based attorney has practiced law since 1984, concentrating in hospitality law since the early 1990s. She drafts standardized contracts, provides legal training for sales staff, and handles convention- and meeting-related litigation nationwide for major hotel chains.
Devlin was not able to answer all the questions posed to her while speaking live. She graciously addresses some of the unanswered questions below.
If you missed the free webinar or would like to access it again, here is the link.
Devlin Answers Webinar Questions
Would you mind covering again how to estimate a hotel’s estimated profit for F&B and rooms?
You should determine your minimum commitments in both areas and then discuss with the hotel its range of overall profits for each item (the hotel will not disclose actual figures, which are confidential and trade secret), and apply an estimated profit percentage to the revenues committed. Remember, your damages do not have to be based on profit or reference profit, but damages should not be more than a fair estimate of overall profit.
How do you recommend addressing confidentiality when the information that is confidential is the name of the client, and the fact that they will be hosting their event in this particular location/venue?
If the client will be signing the contract you have to disclose it and ask the hotel to agree that the hotel will not disclose or advertise that the client is holding the event. If the client does not want the hotel to know it is there, then the third party agency will have to sign the contract and not disclose the name, and the third party will be responsible under the contract. That is not really recommended, as it would be virtually impossible for the hotel to never find out the identity of the client over a several-day meeting.
What is your opinion on reciprocal cancellation…. when the hotel wants to cancel your agreement for a larger piece of business that will utilize the entire hotel. Shouldn’t the hotel be held to pay damages to the client in the same way they expect the client to pay?
Reciprocal cancellation is a very bad idea! The damages that a group suffers when a hotel cancels it have nothing to do with the damages that a hotel suffers if the group cancels. Even if there is no clause about the hotel cancelling the group, the hotel will be legally responsible for paying the increased costs that the customer incurs in moving the event, which can vary widely. For an article explaining the dangers of “mutual” or “reciprocal” cancellation clause, see my website: www.devlinfirm.com.
Should there be a clause that holds the hotel liable for any known food allergies/dietary restrictions if the planner specifically states in writing about participants requiring specific foods?
I have not seen clauses like this being requested. The hotel in general has a legal obligation to adhere to safety requirements and not to injure its guests. It can be difficult in a large hotel kitchen that is preparing foods for many events each day it to certify that all items are 100% gluten-free, or meet other restrictions. The key if you have attendees with allergies is advance planning and good communication, which includes documenting allergy issues, and meeting with the chef and banquet captains to ensure that items are properly marked and segregated. Of course, the attendees also need to take responsibility for good communication and making their needs clear.
I have noticed that the hotels are now charging resort fees. How can I prevent a hotel from imposing a resort fee if one was not in place when the contract was signed?
It is very difficult, as hotels will be reluctant to agree that they will not apply any new fees to your event. You can request such a clause, but it will be unlikely that the hotel will agree.
