CIC Prepares To Issue Educational Paper About Meetings Contracts

The Accepted Practices Exchange initiative by the Convention Industry Council in the fourth quarter likely will release its most anticipated product: a paper about meetings contracts, according to the panel chairwoman. However, unlike previous Apex papers that promoted the use of specific forms and templates for housing, requests for proposal and data reporting, the contracts paper focused more on education and less on standardization, she said.

"Contracts are meant to be negotiated. To try and come up with a document that doesn't give away everybody's best negotiation secrets but still is educational and instructional to people—it's been a real balancing act," said Tyra Hilliard, a veteran attorney, speaker and consultant on meetings and event law and chair of the Apex contracts panel.

Hilliard took the helm of the panel two years ago. There are many meeting professionals, planners as well as hotel sales staff, who may be putting their companies at risk in meetings contracts, she said, and the paper is aimed at both buyers and suppliers.

"Remember this is an educational document, it's not meant to take the place of a negotiation. It's meant to help people understand contracts better so that they can negotiate better," she said.

The paper, which has been submitted for industry review, gives an overview of meetings contract basics, some general best practices and explains 23 of the most common meetings contract clauses and approaches to consider when including them. The clauses are listed in alphabetical order to emphasize that none is more important than the others, she said.

"It's a misconception in the industry that there are going to be model clauses here, that this is going to be a model contract—and it's neither," she said. "It's really meant to be an educational document."

For a cancellation clause, the paper advises buyers to establish the amount and timing of penalties, but avoids setting any specific benchmarks for those penalties.

The paper defines indemnification as a contractual promise in which one party agrees to protect another party from liability as a result of a third-party claim, and offers an example of a hotel or conference center sued by a meeting attendee who is injured at an event.

The paper recommends defining different degrees of negligence and checking the group's insurance provider and state laws for any applicable restrictions or coverage.

Hilliard said feedback from industry members has been "almost contradictory" because of the different approaches to contracts and needs of CIC members.

"We're being very careful not to say that you must have this clause in here and that if you do have this clause in here, this is what you need to do. Since the document is intended to be for people from all aspects of the industry, we can't say that. What's a 'should' for a planner is a 'should not' sometimes for a supplier. They've got to be able to negotiate," Hilliard said.

However, the paper may recommend some industry standardization, focused on format, with advice on where to place certain clauses in contracts. The inclusion of that recommended format would be decided by industry feedback, she said. The panel is hesitant to include a standard format because readers may use it as a contract checklist—when not all clauses are necessary.

"This is a really powerful piece because basically we're not saying that you should have all of these clauses in every contract. We're trying to say if they are in the contract, let's put them in this order so that everybody knows where they fall on the contract. It will hopefully speed up the review process. Planners will be able to compare hotel contracts side-by-side," she said.

Standardized labels for each clause also could speed up the review process, she said. For example, attrition also can be called a performance or a guarantee clause.

Five of the six-year project's seven core deliverables have been completed. In addition to the upcoming paper on contracts, CIC also plans to issue accepted practices for consistent and thorough profile formats for sites, as well as meetings, conventions, and other events, that include both core and unique information.

Though the possibility of a universally accepted model meeting contract may be remote, the industry continues to push for more efficiency in negotiations.

Attempts to draft standard contracts either across a hotel chain, by meeting type or city have been mostly unsuccessful, Hilliard said.

"Those who push for standard contracts do so because they want to save time," Hilliard said, "but I don't see it. I don't think the hotels want it and the planners would really be happy with it in the long run. What you negotiate with one hotel, you might be able to negotiate with another hotel better."