Contract negotiation tips and suggestions
07/28/08
Jennifer Cherock

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Contract negotiations can be challenging and fairly time consuming under even the best of circumstances. It's easy to get confused and caught off guard if you're not paying close attention to every detail during the contract negotiation phase of your event planning project. To ensure that you're getting the best deal possible and to avoid costly mistakes, here are some tips that can help you along the process:

Hire a Professional
Whenever possible, have an event planning professional conduct the contract negotiations for you. Planners are familiar with the processes, verbiage and standards. Simply put, they know what to look for. Red flags that may not be noticeable to the average customer are more likely to stand out with planners because it's what they deal with on a consistent basis.

Another good reason to hire a professional is because they're typically able to negotiate better rates and amenities because there is always the opportunity and hope that they'll bring in more business to the venue with some of the planner's other clients. A good planner takes time to build positive working relationships with particular venues and their staff members and if they find a venue that exceeds expectations and takes excellent care of their client's needs, they'll more than likely use that venue again - and sales agents bank on this. Repeat business is key in this industry. It creates less work, has the ability to generate more money, and it allows for a more seamless event when they're already used to a particular group/project.

Finally, when working on an event that requires sleeping rooms for guests, you can have an event professional handle the site selection AND contract negotiation at no cost to you or your company! Most hotels will give a small commission to the planner based on the revenue generated from the sleeping rooms used. It's a win-win situation for everyone in that it alleviates the time and hassle that you would have had to go through, it brings business to the hotel, and the planner is compensated for their time!

Get Everything in Writing
And I mean EVERYTHING. Never, ever, ever negotiate something over the phone or during a meeting without following up with written and signed statements. This might seem a bit formal for some, but it can prevent major headaches down the line. It's just not worth the risk to rely on verbal agreements - don't do it. You never know when someone is going to leave a company or what changes might occur during the time you negotiate your deal until the time of your actual event. Write it, sign it, never deviate from it.

Ask Questions
Throughout the contract negotiation process, ask every question you may have and never feel silly for doing so. As I mentioned earlier, contracts can be confusing. The verbiage may not be clear or written in a way that makes sense to you. It is better to find out the answer to your questions up front than to sign something and pay a penalty later just because you didn't understand. Read every word on the document very carefully, and then read it again! Be a detective and never assume that something is okay if it doesn't make sense or feel right to you. Beware of hidden costs and always ask about taxes and service charges. In fact, when it comes to taxes, service charges, gratuities, etc - ask the venue's staff for a specific breakdown so you know exactly what type of costs you'll be incurring and not left with surprise charges after your event.

Customize the Contract
Don't feel obligated to sign a contract that has been developed by the hotel. Your event has individual needs that a standardized form/contract may not be able to meet. Therefore, you should always feel free to ask your venue contact person to accommodate the particulars of your event with a customized contract. Whether it's re-writing it, making notes on their standard contracts, or creating addendums to go along with their forms - never feel like you have to sign what they present to you if you're uncomfortable. Most venues are willing to work with you and realize that contracts provided by either party may not be applicable or fair to both sides. And remember that if you have a standard contract that you typically work with, you may also need to be flexible if the venue isn't comfortable with your standardized contract.

Protect Yourself and/or Your Client
While the venue does have every right to protect themselves in case you cancel your event or do not meet the agreed upon goals (sleeping rooms, food and beverage costs, etc), you too must ensure that you (or your client) are protected. It would be bad business for a venue to simply forfeit your event in order to accommodate another group that may be more lucrative or better in some way for the venue. And I cannot imagine any establishment doing so. But just in case, and so you're always covered, the contract should carry a two-way cancellation clause that protects you and the venue. Everyone must be hold up their end of the bargain regardless of what may come up in the future.

When working with hotels, always pay close attention to the attrition clause. Ideally, you should get credit for attendees who book outside of your room block -not just for the agreed upon dates. Be sure to state that you want the room nights to be counted cumulatively, not by room nights. So if you have 100 rooms held for Friday and 100 rooms on Saturday - but your guests come in at 150 on Friday and 50 on Saturday - you're not penalized. Also, include a resell clause that requires the hotel to make an effort to sell the rooms you do not fill.

Lastly, make sure your contracts always include a force majeure clause that allows you to cancel without penalty in the event of circumstances that are out of your control. These items include, but are not limited to, natural disasters, acts of God, disease outbreaks, acts of war and terrorism, etc.