Nick Milne, who heads up the commercial activity as College Steward at Robinson College, Cambridge, explores the minefield of venue contracts, emphasising their importance in protecting the interests of clients.
What are the most important points event planners need to know about venue contracts?
The
Meetings Industry Association offers AIM – the UK’s only nationally recognised standard for service providers in the business meetings, conferences and events industry. AIM acts as an assurance to buyers as all venues and suppliers seeking the accreditation are audited against a strict 50-point criteria, including quality of facilities, accessibility, legal compliance, customer service and best practice standards.
With regards to legal compliance, these are the five key requirements for venues to become AIM accredited:
1. The venue should provide its Ts and Cs with their first proposal to give ample time for the entire business proposition to be considered.
2. Conference staff are fully trained in the contracting processes and the terms and conditions so they can respond competently to any queries.
3. The venue is prepared to negotiate on the terms and conditions.
4. Once agreed, the venue always countersigns the contract to show its commitment to best business practice.
5. The venue will always endeavour to mitigate its loss in the event of cancellation and will reduce charges to clients accordingly.
Nick Milne.
How important is the small print?
The small print is very important and the whole document should always be read fully. Venue’s don’t try to hide things, but clients should look for the venue’s position on cancellation charges, reduction in numbers (attrition), circumstances where deposits are non-refundable, liabilities and indemnities. Also, for one-sided (venue protection only) force majeure clauses.
What’s a big red flag when negotiating venue contracts?
Venues should always be prepared to negotiate on their terms and conditions so if they’re not being prepared to negotiate, it’s a big red flag.
What’s the most common way event planners get stung by venue contracts?
Event planners need to have the confidence to question the terms and not just accept them at face value. Anything that doesn’t feel fair, should be queried. However, it may be that the terms have to be accepted where supply and demand are working against the buyer.
How can event planners ensure they’re getting the best deal?
It will feel fair. Business should be a win:win outcome for both parties. If the venue or the client drive too hard a bargain, that’s a recipe for a poor relationship.
What can event planners do if the contract is breached by the venue?
Challenge the situation. Raise a complaint within the venue and follow the venue’s procedure through to the end. Then, if it still not resolved satisfactorily, where the venue is accredited – e.g. as an AIM venue - raise the matter with the
Meetings Industry Association, who will conduct an investigation. A final step may be to go legal.
What are the planners’ rights if they breach the contract?
This depends upon which element they breach. In the main, this would be failing to hold the event – cancellation, postponement, reduced delegate numbers or event duration.
In that case, compensation (cancellation charges) should only be to the extent that the venue would be put back in the position (financially) that it would have been, had the contract been properly performed – i.e. the venue should charge for loss of profit, not loss of revenue. Where the cancellation charges are pre-agreed – liquidated damages – the client should ensure that the charge is a genuine pre-estimate of the venue’s loss and is entitled to question how the charge was arrived at
What should event planners be requesting from the venue, but perhaps feel they can’t?
Anything.
Event Planners need to know this stuff and be prepared to negotiate. That does mean being prepared to 'give', in order to 'take' – e.g. an extra £1 on the delegate rate in order to have 35 days (instead of 28) payment terms. They need to ask for the Ts and Cs early if the venue doesn’t issue them, and then look at what elements they can use as bargaining chips.
What happens if a venue changes hands before the event has taken place?
There may well be legal considerations, which would pertain to the specific circumstances. In more general terms of best practice and goodwill, the new owner should be prepared to honour the terms upon which the client contracted or allow the client to cancel without penalty if the new terms are unacceptable.
A desire to travel led Holly Patrick to the business meetings and events world and she’s never looked back. Holly takes a particular interest in event sustainability and creating a diverse and inclusive industry. When she’s not working, she can be found rolling skating along Brighton seafront listening to an eclectic playlist, featuring the likes of Patti Smith, Sean Paul, and Arooj Aftab.
