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November/December 2007
Cheat Sheet: Your most important show contracts
By Linda C. Chandler
Here are the 10 most important contracts every show organizer should have in their files — and some of the most common points of contention. This is for informational purposes only and should not be taken as legal advice. As always, please consult an attorney for legal advice and counsel.
The Exhibitor Contract
• Be precise about payment schedules and what’s included, such as drayage and booth packages.
• Require proof of insurance from exhibitors and exhibitorappointed contractors, and check issues such as “waiver of subrogation” and indemnification clauses. Policies often name a facility or exhibitor as additional insured; get them to name the organizer, too.
• Require compliance with local laws, such as gambling regulations (raffles), alcohol/food consumption restrictions, music licensing, etc.
• Be sure the contract allows a date shift or a move to a comparable space in case the facility is unavailable (due to natural disaster, for instance).
The Audiovisual/Technology/ Computer Contract
■ Specify that all work products (speaker presentations, video productions, etc.) belong to the group, not to the contractor. Include intellectual property and confidentiality clauses.
■ Be sure you won’t be billed for down time, lost time or repair costs for equipment that is supposed to be working. Set penalties if they can’t deliver what’s specified.
■ Limit substitutions. Name the pieces of equipment required for each area and duration of their use.
The Transportation Contract
■ Be sure vehicles are ADA compliant, licensed and insured. Require that all drivers wear uniforms and have background checks and proper licensing.
■ Spell out any fuel surcharges and the specific routes, schedules and number and types of vehicles to be used.
■ Ensure you are indemnified and named as an additional insured on their insurance.
■ State that you will be allowed to make changes or modify service during the event to adjust to usage levels (need more buses at one hotel or more frequent shuttles, etc.).
The Facility Contract
• Spell out exact rooms to be used, and move-in, move-out times.
• Watch for indemnification language that relieves the facility from liability even when something is due to the facility’s negligence.
• Understand building and labor rules and exclusive arrangements with vendors.
• Require that the facility’s condition on show dates is what you saw when contracting (avoid construction messes, etc.).
• Specify security staffing, times and areas covered (not just the building but whether outside and parking areas are included).
The Hotel Contract
• Make sure the contract provides for audits and attrition based on lost profits, not lost gross revenue. Secure the right to review room lists to ensure credit for all attendees. Spell out attrition calculation formulas and even give an example in the contract.
• Get a rate guarantee, or “most favored group” rate base, meaning no public rate will be lower than your group’s negotiated rate so attendees won’t book outside the block.
• Name your room space and don’t allow for “comparable” substitution without your permission. (Another ballroom may be the same size but has a lower ceiling or pillars.)
• Note any resort fees or other hidden costs.
• Beware of a “walk” clause that allows the hotel to find another place for your group if it decides to. Clarify whether a walk constitutes a cancellation and entitles you to compensation. Walking may create logistical and transportation nightmares.
The Registration/Housing Contract
■ Guarantee that software is fully compatible not only with your database but also with that of hotels and lead-retrieval systems in use.
■ Specify intellectual property and confidentiality issues. Be sure you own the data, and place restrictions on its use to protect your customers.
■ Spell out services included — badge stock, number of staff on site, etc.
■ Ensure there are no add-on costs, hidden rebates or kickbacks. Include payment terms, specifying whether hotels pay commission or you pay fees.
The General Services Contractor Contract
■ Require contractors to carry insurance, including workers comp, and be sure to be named as an additional insured and indemnified in case of claims.
■ Be sure there is disclosure of independent contractor relationships or subcontractors.
■ Specify that all contractors and subcontractors are fully compliant with applicable laws and licensing requirements.
■ Spell out pricing to exhibitors as well as organizer.
The Sponsorship Contract
■ Be sure sponsorship arrangements are fully compliant with IRS-qualified sponsorship payments. Undue benefits to sponsors can trigger UBIT (unrelated business income tax).
■ Spell out exactly what each party receives (including details such as where banners can be hung and for how long, etc.) and how payment is accepted (in-kind, barter, cash).
■ Include a clause allowing the right to review and refuse any materials sponsors plan to use or products they want to distribute.
■ Secure the right to use the sponsor’s name, logo, product images, etc. (limited license) in any media (print, Web, etc.) promoting the event.
The Food & Beverage Contract
• Be sure you have indemnification for claims involving alcoholic beverage service or food-borne illnesses.
• Specify whether pricing includes taxes and gratuities and that these are calculated on amounts actually served.
• Specify all menus and beverages, types of service (buffet, sit-down, etc.), spaces to be used and number of bartenders or wait staff, and don’t allow substitutions without permission.
• Check the deadlines for changes to minimums or guarantees and write in variance percentage allowances (e.g., if you achieve 90 percent of your order, you pay only for the 90 percent, not the whole amount.).
The Special Events Contract
■ Be sure F&B issues are covered.
■ Have venue guarantee it’s in compliance with ADA and all laws and safety regulations.
■ Require insurance and your indemnification.
■ Specify backup plans for outdoor events.
■ Have separate contracts for performers and speakers, specifying rights to use photos in promotions, cancellation or illness issues, copyright infringement, etc.
Contract must-haves
At the very minimum, every contract should include:
• Services/locations included in the transaction.
• Payment terms.
• Dates and times.
• Staffing requirements.
• Cancellation/refund provisions.
• Insurance and indemnification clauses.
Linda C. Chandler is a freelance writer and editor based in Tyler, TX. She has written for association and convention publications for 19 years and is an active member of Tyler CVB’s tourism committee. Contact her at linda.chandler@earthlink.net.
Exclusive Web-only content from this month’s Cheat Sheet:
Insurance policies are contracts between the insurer and the insured. Read them thoroughly.
· Be sure the policy is written by a company that is an admitted carrier in the locale where the event is held (especially true for international events).
· Every contract should require insurance of both parties, and parties should indemnify one another. Note that many convention centers and hotels require a waiver of subrogation.
· Clearly understand definitions of “exclusion” to ensure that its meaning is not “anything likely to happen to the insured.” · Don’t pay for issuing certificates of additional insured parties.
· Pay attention to limits, deductibles, types of losses that trigger coverage, and whether loss of attendance and full cancellation are covered.
Intellectual property protection is a growing legal issue. Be sure you protect your own brand from infringement and do what is needed to prevent liability for unauthorized use of others’ property.
· In securing a license to use any person or organization’s name, logo or product image, be sure to specify any fees involved and the term of the license. (They’re not indefinite or eternal.)
· Be sure to copyright or trademark your own materials and require any exhibitors or others who might be involved in your show to sign a limited use agreement (it can be a clause in your exhibitor contract) with a term of use and specifics on how your logo or other intellectual property can be used by them.
· Exhibitors must be able to produce music licenses—ASCAP/BMI/SESAC—or not be allowed to use music.
· Licensing should be separate from the indemnification clause. You should be protected against actual and alleged claims.
Organizers are usually conscientious about force majeure clauses in convention center and hotel contracts so they’re protected in case of cancellation or low attendance. What some organizers overlook is that contracts with other suppliers like transportation, destination marketing companies, audiovisual providers, florists and printers also hinge on the occurrence of the event. Unless you’re sure to include cancellation or reduced attendance clauses in your smaller vendor contracts, you may find you can’t walk away from them without payment or, at least, penalties. |
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