MEEC

Chapter TwelveLegal Issues In The MEEC

Negotiation Negotiation

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

Negotiation "Win-Win" vs. the real "Winner“

Both parties feel satisfied about the outcome vs. the party who is better prepared entering the

negotiation and has a good idea of what he or she wants

"Dates, Rates and Space” You can only have two. 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.

Negotiation Strategies Do Your Homework

Develop a “game plan” of the outcomes sought, and prioritize your needs and wants. Learn as much about the other side’s position as you can.

Keep Your Eyes on the Prize Don't forget the outcome sought.

Leave Something on the Table It may provide an opportunity to come back later

and renew the negotiations.

Negotiation Strategies Don't Be the First One to Make an Offer

Letting the other person make the first move sets the outside parameters for the negotiation.

Bluff, But Don't Lie When There's a Roadblock, Find a More

Creative Path Thinking “outside the box” often leads to a

solution.

Negotiation Strategies Timing is Everything

Remember that time always works against the person who doesn't have it, and that 90% of negotiation usually occurs in the last 10% of the time allocated.

Listen, Listen, Listen...and Don't Get Emotional Letting emotions rule a negotiation will cause one

to lose sight of what result is important.

Negotiation Strategies Information to Know about the Property

Mix of transient vs. group business Seasons

High, low and shoulder Local cultural events

Arrival / Departure patterns Hotel Revenue / Profits

Rooms profit @ 74% Food & Beverage profit @ 17%

Yield Management Program / Methods Guest Room to Meeting Space ratio

Negotiation Strategies Information to Know about Your Group

Profile of Attendees Who they are / What they do Demographics

History Previous Meeting / Event locations Room block negotiated vs. actual pick-up Food and Beverage guarantees vs. actual

Negotiation Strategies Information to Know about Your Group

Net Worth of Meeting Summary of all revenue generated for the property

Guest rooms Food and Beverage In-conjunction events Meeting space rental Audio-visual / equipment rental Business services Recreational events

Hotel Post-Conference Reports

Negotiation Strategies Flexibility

Alter program format Revise space requirements Release 24-hour holds Different dates Change arrival / departure pattern

Contracts 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 recognizes as a duty.

The essential elements of a contract are: Offer by one party Acceptance of the offer as presented, and Consideration (i.e., the price negotiated and paid

for the agreement).

Contracts Offer

In a meeting context, the hotel or other venue is usually the offeror;

The written agreement is generally proposed, after some preliminary negotiation, by the hotel.

The meeting sponsor becomes the offeree, but typically a counter-offer is made.

Contracts Acceptance

Acceptance must be unequivocal and in the same terms as the offer.

Acceptance must be communicated to the offeror using the same means as the offeror used

if the offer is made in writing, the acceptance must be in writing.

Contracts Acceptance

Mere silence on the part of the offeree is never construed as acceptance,

an offeror cannot impose an agreement on the other party by stating that the contract will be assumed if no response if given by a specified date.

Contracts Consideration

the price negotiated and paid for the agreement. Consideration generally involves money paid for the

other party's promise to perform certain functions It could also be an exchange of mutual promises,

as in a barter situation. Consideration must be whether the act or return

promise results in a benefit to the promisor or a detriment to the promisee.

It is important that both promises be legally enforceable to constitute valid consideration.

Contracts Oral vs. written

it is better to have a written document - less chance for a misunderstanding about the terms of the agreement

Agreements that must be in writing contracts for the sale or lease of real estate contracts which are not to be performed within one

year of agreement A valid written contract must contain the

identity of the parties, an identification of the subject matter and terms of agreement, and a statement of consideration

Contracts Addenda

Many contracts, especially meeting contracts, contain addenda prepared at the same time or sometimes subsequent to the signing of the contract.

In cases where the terms of an addendum differ from those of the contract, the addendum prevails.

Contracts Types of contracts

agreement with the hotel and/or trade show facility.

ancillary services temporary employees security audio/visual equipment destination management (e.g., tours and local

transportation)

Contracts Types of contracts

entertainment outside food and beverage exhibitor services/decorating housing bureaus travel agencies airlines rental car companies

Negotiating Contracts Go into the negotiations with a plan. Always go into a contract negotiation with an

alternative location or service provider in mind.

Be thorough. Don't assume anything. Be specific. Beware of language which sounds

acceptable, but isn't specific.

Negotiating Contracts Don't accept something just because it's pre-

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

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

And never give one party the unilateral right

to do anything, such as change the location of meeting rooms without consent of the meeting sponsor.

Negotiating Contracts Remember that a meeting contract provides a

"package" of funds to a hotel. Never sign a contract where major items are

left to future negotiation. Specify special room rates -- e.g., for staff

and speakers

Negotiating Contracts Provide the ability to cancel a meeting without

penalty or damages if hotel ownership or management is changed; the meeting outgrows hotel space or substantially

shrinks in size; the hotel does not perform satisfactorily at an

earlier meeting or an adverse change in the hotel's quality rating,

Negotiating Contracts A cancellation payment should be specified in

dollars, or should be based on the hotel's lost profit, rather than lost revenue.

Measure lost room revenue sales against the normal occupancy for the particular time of the year, not against the hotel's capacity.

Damages should not be payable if the hotel resells the space.

Do not agree to any changes that are not either spelled out in the contract or a later addendum.

Contract Provisions Attrition Clauses

(sometimes also referred to as performance or slippage clauses) provide for the payment of damages to the hotel when a meeting sponsor fails to fully utilize the room block specified in the contract.

damages for failure to meet a room block commitment should never be payable if the hotel is able to resell the rooms;

the contract should impose a specific requirement on the hotel to try and resell the rooms and, if possible, require the hotel to resell the rooms in the organization's room block first

Contract Clauses Cancellation Clause

This is the provision which provides for damages should the meeting be canceled for reasons other than those specified, either in the same clause or in the Termination provision. .

Cancellation is often provided without damages so long as it is done within a specified time (e.g., 2-3 years) prior to the meeting.

The damages are sometimes stated on a sliding scale basis, with greater damages being paid the closer to the meeting date the cancellation occurs.

Contract Clauses Termination

Sometimes called a "force majeure" or "Act of God" clause,

Permits either party to terminate the contract without damages if fulfillment of the obligations imposed in the agreement are rendered impossible by occurrences outside of the control of either party.

This usually includes such things as strikes, severe weather, transportation difficulties, etc.

Contract Resolutions Specify the damages to be awarded in

the event of a breach by either party. Damages are typically stated as

"liquidated damages," that is, damages that the parties agree in advance as a result of a breach.

Contract Resolutions Four Methods:

Privately and informally, in a businesslike way that encourages continued business relationships.

Forget the possibility of reaching a solution and walk away from the problem

Go to court and sue Resolve the dispute through other means.

Contract Resolutions Arbitration

Means of settling disputes without the courts Designed for quick, practical and inexpensive

settlements. Either party can utilize lawyers, Minimum of pre-trial procedures. The parties also generally agree that the results

are binding and cannot be appealed to a court of law.

Risk Management What risks are involved:

Contractual risks Operational risks Negligent occurrences Acts of God

Risk Management How to manage risk – three ways:

The risk can be avoided; The risk can be transferred to another party

involved in the transaction; The risk can be insured - a form of transference,

using an insurance company’s money to pay any damages.

Insurance Issues Insurance types

Worker's compensation insurance provides coverage for employees who are injured on the

job. Comprehensive general liability (CGL)

Check for events or incidents where there might be an exclusion.

Alcohol server liability part of any CGL policy.

Insurance Issues Insurance types

Association professional liability (APL) protect the organization and its officers, directors, staff

and volunteers Convention cancellation policies

are a specialized form of protection, insuring against unforeseen circumstances, such as labor disputes, inclement weather, or damage to the convention or meeting facility.

Exhibitors’ liability policies provide protection to the organization for damage caused

by exhibitors.

Insurance Issues Planners should review the definition of who is the

"insured" under the policy How much insurance to carry is also a concern for

planners. the typical general liability policy has coverage limits of 1 to 2 million dollars.

Americans with Disabilities Act (ADA) It is illegal to discriminate against, or fail to

accommodate people in wheelchairs, those with visual impairments, hearing impairments, food restrictions, etc.

ADA applies to meeting planners and organizers. They must: determine the extent to which attendees have

disabilities and make reasonable efforts to accommodate the

special needs of those attendees at no cost to the attendee.

Guidelines for Addressing ADA General Areas

Staff training Etiquette Language Role Play

 

Guidelines for Addressing ADA Provide opportunities for persons with

disabilities to identify themselves and request accommodation Membership applications Meeting Registrations Certification process applications

 

Guidelines for Addressing ADA Accommodations for blind and visually

impaired Technology orientation Mobility specialists Tactile maps Scribes or Readers

 

Guidelines for Addressing ADA Accommodations for individuals who are

deaf or hard of hearing Relay service TDD/TTY Email Captioning

Real time OR Open/closed Interpreters

ASL, PSE, SEE Oral interpretation

Guidelines for Addressing ADA Boards and Committees

Minutes and documents in alternative media Braille Text files E-mail

Voting Visual signals Auditory signals

Conference calls using chat rooms or video

Social Functions

Intellectual Property Music licensing

The federal Copyright Act Music at a meeting is being "performed" whether it

is live or recorded. The organization sponsoring the event is

considered to be controlling the "performance."

Intellectual Property Music Licensing Agreements

American Society of Composers, Authors and Publishers (ASCAP)

Broadcast Music, Inc. (BMI) Failure to sign these agreements = copyright

infringement. The organization sponsoring the event must obtain the

requisite licenses – NOT the performers.

Intellectual Property Recording or video taping speakers

Purpose Sell copies to meeting attendees (or to those who

could not attend) Archival purposes.

Obtain written permission of the presenter

Labor Issues The federal Fair Labor Standards Act (FLSA)

prescribes minimum wage requires all workers subject minimum wage

coverage must receive overtime pay unless they are specifically exempted by the statute.

“Comp time" is legal is if it's given in the same week that the extra hours are worked, or in another week of the same pay period, and if the extra time off offsets the overtime worked (i.e., at the time-and-one half rate).

Labor Issues Employees:

Exempt (from overtime pay requirements) and non-exempt

Full-time or part-time Temporary or Independent Contractor

Review Contracts Negotiations Risk Management Insurance Americans With Disabilities Act Intellectual Property Labor Issues