Understanding Legal Issues in the MEEC Industry

prepared by: Rose Ann Cua

Negotiation

•Is the process by which a meeting planner and a hotel representative reach an agreement on the terms and conditions that will govern their relationship before, during, and after meeting, convention, exposition, or event.

•While many believe that the goal of a negotiation is to create a win-win situation, in fact the real “winner” may be the party who is better prepared entering the negotiation and who has a good idea of what he or she wants.

•Many hoteliers, particularly those who have been in the industry for many years, sum up meeting negotiations with this simple maxim: “Dates, rates, and space – you can only have two” Following this maxim, the planner can get the dates and meeting space he or she wants for a meeting but may have to give a little on the rate.

•In reality, what is negotiable includes not only space, room rates, and meeting dates but also such things as complimentary room ratios, cutoff dates. Rates after cutoff, attrition or cancellation clauses, meeting or exhibit space rental, comp suites, staff rates, limo service, audiovisual rates, VIP amenities, parking fees, and food and beverage provision.

One Negotiator has offered these tips:

Do you Homework: Keep your eyes on the prize: Leave something on the table: Do not be the first one to make an offer: Bluff, but do not lie: When there is a roadblock, Find a more

creative path: Timing is everything: Listen, Listen, Listen : and do not get

emotional.

If a meeting planner is going to successfully negotiate with a hotel, the planner should:

Understand the competitive marketplace in which the hotel operates, for instance, its strengths, weaknesses, and occupancy patters.

Understand how a hotel evaluates business.

Understand the meeting in its perspective, using detailed information to support this approach.

To understand how a hotel approaches a meeting negotiation, the planner must first know about the hotel. Some of the necessary information is obvious.

Location. Is the hotel downtown, near an airport, or close to a convention center?

Type. Is the hotel a resort with a golf course, tennis court, and other amenities? Is it a conevention hotel with a great deal of meeting space or a small venue with limited meeting facilities?

Information

•As indicated, a hotel may base its evaluation of a meeting, especially one its has never hosted before, on its perception of the industry or profession represented by the meeting sponsor. Thus the sponsor can counter any negative impressions, or buttress positive ones, by providing the hotel with as much information as possible on the sponor’s meeting history.

The planner should:

oSleeping roomsoMeeting roomsoCatered roomsoEquipment rentaloBusiness servicesoRecreational eventsoHistorical information on group

Data comes in two forms

Hard

Soft

Flexibility

•A planner can also gain some bargaining leverage with a hotel by being flexible in his or her request.

Contracts

•Is an agreement between two or more persons consisting of a promise or mutual promises which the law will enforce, or the performance of which the law recognized as a duty.

•A contract need not be called a contract but can referred to as an agreement, a letter of agreement, a memorandum of understanding, and sometimes a letter of intent or a proposal.

Following are the essential of a contract:•An offer by one party•The acceptance of the offer as presented•The consideration

Offers can be terminated prior to acceptance in one of several ways:•At the expiration of a specified time

•At the expiration of a reasonable time period

•On specific revocation by the offeror

•A rejection of the offer by the offeree or the proposal of a counteroffer terminates the original offer, but a request for additional information about the offer is not construed as a rejection of the offer.

•Often, a meeting contract proposal from a hotel will contain a specified termination period for the offer, these offers are usually couched in the phrase “ tentative first option ” or in similar wording. Because the meeting sponsor pays or promises nothing for this “ option ” it is nothing more that a contract offer, which must be specifically accepted by the meeting planner.

• In a meeting context, the hotel or other venue is usually the offeror that is, the written agreement is generally proposed after some preliminary negotiation by the hotel.

• In order for an offer to be accepted, the acceptance must be unequivocal and in the same terms as the offer. Any deviation from the offer’s terms is not acceptance, it is a counteroffer, which must then be accepted by the original offeror in order for a valid contract to exist.

•Acceptance must be communicated to the offeror using the same means as the offeror used. In other words, if the offer is made in writing, the acceptance must be in writing. Mere silence on the part of the offeree is never construed as acceptance.

•As indicated, consideration is the price negotiated and paid for the agreement.

Following general rules will help with the negotiation of a meeting contract:

Go into the Negotiations with a plan.Always go into a contract Negotiation with an

alternative location or service provider in mind.Do not assume anything.Be specific.Beware of language that sounds acceptable but

is not specific.Do not accept something just because it is

preprinted on the contract or the proposal is given to you by the other party.

Read the small print.Look for mutuality in the contract’s provisions.

In addition to theses general rules apllicable to all contract negotiations, there are some special rules about hotel contracts that should also be kept in mind

Remember that a meeting contract provides a

“ package” of funds to a hotel.Never sign a contract in which major

items are left to future negotiation.Specify special room rates- such as for

staff and speakers- and indicate any upgrades for them.

Remember that while it is preferable to have specific meeting and function rooms designated in the contract.

Provide the ability to cancel a meeting without penalty or damages if:

Hotel ownership, management, or brand affiliation .

The meeting outgrows hotel space or substanially shrinks in size.

The hotel does not perform satisfactorily at an earlier meeting.

Every meeting contract should contain the following provision, usually as the introductory paragraph:

This agreement dated______is between (official legal name of entity), a (name of state) (corporation) (partnership) doing business as (name of hotel) and having its principal place of business at ( address of contracting party, not hotel ) and (name of meeting sponsor), a (name of state) (partnership) and having its principal place of business at (name of meeting sponsor).

Attrition clauses• Clauses dealing with attrition provide for the

payment of damages to the hotel when a meeting sponsor fails to fully utilize the room block specified in the contract. Most hotels regard the contracted room block as a commitment by the meeting sponsor to fill the number of room nights specified. However, in at least one case, a court determined that the room block did not represent a commitment by the meeting sponsor: that decision was predicated, in part, on contract language that indicated that room reservations would be made by individuals and not the meeting sponsor.

Cancellation Provision

• Provides for damages should the meeting be canceled for reasons other than those specified, either in the same clause or in the termination provision. More often than not, this provision in a hotel-provided agreement is one-sided- it provides damage to the hotel in the event the meeting sponsor cancels.

Termination

•Sometimes called a force majeure or act of god clause, the termination provision permits either party to terminate the contract without damages if fulfillment of the obligations imposed in the agreement is rendered impossible by occurrences outside the control of either party.

•“ Inappropriate or impractical ” situation referred to in the discussion of cancellation provisions. However, many hotels seek to limit termination to situations where performance becomes illegal or impossible, so some negotiation is usually required.

Risk – all risk falls into the following four categories:

1) Contractual risk2) Operational risk3) Negligent occurrence4) Act of god

Americans with Disabilities Act•Federal legislation makes it illegal to

discriminate against or fail to accommodate people with disabilities. The legislation resulted in passage of the AMERICANS WITH Disabilities Act (ADA), which places responsibility on the owners and operators of public facilities to make reasonable accommodations for people with any types of disabilities.

Intellectual Property• Many meetings and trade shows feature events at which

music is played, either by live musicians or through the use of prerecorded CDs.

• Music may be provided as a background or as a primary focus of attention. At trade shows, individual exhibitors as well as the sponsoring organization can provide music.

• Regardless of how music is provided, it is important to remember that under the federal copyright act, the music is being “ performed , and according to many court decisions, the organization sponsoring the event is considered to be controlling the

“ performance”.

Recording or videotaping of speakers

•An organization sponsoring a meeting will often want to make audio or video recordings of certain speakers or programs, either for the purpose of selling copies to those who could not attend or for archival purpose.

•Speakers or program participants have a common law copyright interest in their presentations, and the law prohibits the sponsoring organization from selling audio or video copies of any presentation without obtaining the written permission of the presenter.

•Permission can be obtained by having each speaker whose session is to be recorded sign a copyright waiver, a simple document acknowledging that the speaker’s session is going to be recorded and giving the sponsoring organization permission to sell the recordings made of the speaker’s presentation.

Ethics

1. The study of standards of conduct and moral judgment, moral philosophy.

2. The system or code of morals of a particular philosopher, religion, group, profession.etc..

THANK YOU !!!