What do I need to look for when checking a venue contract?

checking a venue contract

Why have contracts?
It is important that both the venue and client are clear about their rights and responsibilities when booking a conference or event. A written document, usually in the form of a legal contract is the best way to achieve this and help to ensure there are no misunderstandings and details are not forgotten or overlooked.
Contracts for major events are a starting point for further negotiation - a roadmap for the way forward. With major events it is inevitable that requirements will be refined or changed as planning and preparations proceeds.
No single agreement will work perfectly for every event, venue or location. The wording and clauses will differ in each case, some will be simple agreements others more elaborate legal documents. In all cases it is imperative the contract is read thoroughly and understood to avoid future problems.

What to expect in a contract-
The issues listed below are by no means comprehensive but fairly common in major meetings. Some venues use more than one document to outline everything involved in the hiring arrangement. The detailed conditions of hire may be separate from the overall agreement or contract to hire. Regardless of how the information is presented, both venues and clients should expect the following clauses to be included in a sound contract.

Preamble
Most contracts will begin with a preamble that identifies the parties, their physical addresses, company registration number, title, reference numbers and proposed event dates.

Definitions
Many contracts start with a series of definitions; some are legal and some specific to the industry or venue. The aim is to ensure both parties have a clear understanding of the terminology contained in the contract to avoid repetition throughout the document. Some of the terminology used -

  • Contracting parties - Commonly used descriptions are lessor/lessee and licensor/licensee. The 'lessor/licensor is the venue operator and lessee/licensee is the client.
  • Event - Name of the event is specified at the start of negotiations
  • Venue - this should identify room names, parts of the venue that are contracted for use.
  • Vacate - It is important that everyone understands exactly what leaving the venue at the end of the event entails. Usually is means the complete removal of everything brought in to the venue by the client. Leaving the venue as it was found is the general rule and common requirement and the implications of failing to do so, will probably be documented.
  • Hazardous substances - The venue will be bound by health & safety regulations and will require full details of any hazardous substances that might be brought on site and could pose a risk of fire or damage to the venue or the health and safety of people in it.
  • Force Majeure - It is a commonly used term used in many contracts and essentially frees both parties from liability or obligation in the event of a problem or circumstance beyond their control, i.e. act of God such as earthquake, flooding etc.


Summary of activities -
The contract should describe the event; detail all rooms to be used, stipulate occupancy dates and hours of occupancy. Including any 'set up' take down time. If the time limit set by the venue is exceeded, they may well charge for any additional time.
The main contract should contain a brief description of the event and then as sometimes happens; the entire event schedule can be detailed in a referenced attachment, together with detailed costs. Inclusions and Exclusions
An inclusion clause or section will outline the specific amenities and facilities that are included in the venue hire price. It will specify room, equipment hire etc. To avoid misunderstandings, the contract should ensure any exclusion is listed. It should also specify what additional costs are involved if any excluded services is required.

Catering
The contract should clearly define what food and beverage is included and if this is being supplied by the venue or an external source.

Payments
Most venues will require a deposit to secure a large booking and many may seek staggered payments leading up to the event. Payment schedules will vary according to the size of the event, how far ahead it is booked and how busy the venue is. Always ensure the payment options are understood and agreed in advance, a payment option might be 10% on confirmation of the booking, with staggered payments and the balance maybe 30 days before the event.

Cancellations
The contract should be very specific about the terms and costs involved with cancellations. As with payments, policies on cancellations will vary depending on the size of the event, the notification period and whether or not a replacement event of the same size and duration can be booked.
In general if the client does not fulfil the contracted payment requirements, the venue is under no obligation to hold the space. Each venue will have different requirements for the postponement of an event. Generally the closer the postponement to the date of the event, the heavier the financial penalty unless the venue is able to re sell the space.

Insurance
The insurance clause sets out the types and limits of insurance cover parties to a contract must secure and maintain. This ensures that if something goes wrong, each party is assured that the other has the wherewithal to pay for the damages or loss for which it is responsible.

Indemnification
The Indemnification clause is intended to manage liability exposure and is commonly used by the venue to ask their clients to indemnify them, their owners, officers and directors from any legal action arising in connection with the client's event, but which is not due to the venue's own negligence.

Amendments to the contract
Any amendments to the original contract should be in writing and agreed to- and signed by both parties.
For further information or assistance with Contract signing, contact Conferences -UK on 0800 567 0050.

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