LIABILITY AND MEETING PLANNING
©1992 Corbin Ball Associates

Disclaimer: The author is not a lawyer, and this article does not constitute legal advice. All contract clauses should be checked by a legal professional.

LIABILITY

Liability issues should be of very significant concern to all planners and suppliers:

1. We often deal with large numbers of people.

2. We live in a litigious society where law suits are common.

3. We often deal with contracts that can involve significant liability exposure.

4. There are numerous laws that expose planners and suppliers to significant liability.

We all are at risk of liability exposure, either through the organization we represent or, even, personally if we are negligent in performing our jobs.

A KEY ROLE OF MEETING PLANNER/SUPPLIERS:

To minimize our organization's liability (legal obligation) or exposure when making contracts and arrangements.

LIABILITY DEFINITION:

Liability is simply a legal obligation or responsibility.

3 types of liability:

contractual liability: obligation arising from a contract

statute liability: obligation of a violator of a law to pay a penalty for the offense

tortious liability: obligation to pay compensation to victims due to negligence

LIABILITY ISSUES:

1. Music licensing

2. Americans with Disabilities Act (ADA)

3. Liquor Liability

4. Safety/Security Issues

5. Contract liability

I. MUSIC LICENSING:

Liability for use of unlicensed copyrighted song: up to $50,000 per song.

Options:

1. License with both ASCAP (American Society of Composers, Authors and Publisher) and BMI (Broadcast Music Incorporated) (minimum cost: $200/year - $50 ASCAP, $150 BMI)

2. Use no music

3. Restrict music form the exhibit hall*

4. Use unlicensed music

5. Use other "licensing" options

*Sample hold harmless agreement from the International Association of

Exposition Managers (IAEM):

"Each exhibitor is responsible for obtaining all necessary licenses and permits to use music, photographs or other copyrighted material in exhibitors' booths or displays. No exhibitor will be permitted to play, broadcast or have performed any music or use any other copyrighted material, such as photographs or other artistic works, without first presenting to the (your organization's name) proof satisfactory that the exhibitor has, or does not need, a license to use such music or copyrighted material. The (your organizations name) reserves the right to remove from the exhibit hall all or any part of any booth or display which incorporates music, photographs or other copyrighted material for which the exhibitor fails to produce proof that the exhibitor holds all required licenses. The exhibitor shall remain liable for and shall indemnify hand hold the (your organization's name), their agents and employees, harmless from all loss, cost claims, causes of actions, suits, damages, liability, expenses and costs, including reasonable attorney's fees, arising from or out of any violations or infringement (or claimed violation or infringement) by exhibitor, exhibitor's agent or employees of any patent, copyright or trade secret rights or privileges."

II. AMERICANS WITH DISABILITIES ACT (ADA):

Signed into law: January 26, 1990,

Enforcement of the act's public accommodations provision: July 26, 1992

Purpose: To give persons with disabilities equal opportunity for social participation, including access to public and private facilities, transportation facilities, communication options and recreational facilities (only religious groups and private clubs are excepted).

Penalties: Up to $50,000 for first time offenders

The law is muddy (150 heavily worded pages in the National Register) which will need to tested through litigation.

Hoteliers/Facility Owners: Must come in compliance of the law.

Planners: Planners who book properties not complying with the ADA regulations are open to charges of discrimination against the disabled.

Two key points to remember for planners to avoid ADA suit:

1. Contract only with facilities that comply (or are showing a commitment t comply) with ADA. Specifically state this in the contract.

2. Planners should identify individuals with special needs and make every effort within reason to meet them.

Major question to be decided in the courts: What is "reasonable" -- how far must the planner go to accommodate disabled attendees?

Planner's ADA check list:

Planners should now how to determine a facility's compliance level.

Planners should contract only with facilities that comply--or are showing a commitment to comply--with the law and stipulate so in the contract.*

Planners should provide equal access to the meeting and to all information provided at the meeting when readily achievable.

Planners should give attendees a simple, discreet way to indicate on the registration form that they have a special need (i.e. a box at the bottom indicating the attendee has a special need).

Planners should provide assistive communication means (sign interpreters, audio-tapes, braille-written material) when it is likely to be needed.

Proposed ADA Contract Clause:

"American with Disabilities Act Compliance.

1.1 Compliance by the Hotel. Hotel shall be responsible for complying with the public accommodations requirements of the Americans with Disabilities Act ("ADA") not to otherwise allocated to the group in this agreement, including: (1) the "readily achievable" removal of physical barriers to access to the meeting rooms (e.g. speakers' platform and public address systems), sleeping rooms, and common areas (e.g. restaurants, rest rooms and public telephones); (ii) the provision of auxiliary aids and services where necessary to ensure that no disabled individual is treated differently than other individuals by Hotel. (e.g., Braille room service menus or someone to read);

and (iii) th modification of Hotel's policies, practices and procedures applicable to all guests and/or groups as necessary to provide goods and services to disabled individuals (e.g., emergency procedures and policy of holding open accessibl e rooms for hearing and mobility impaired.)

1.2 Compliance by the Group. The group shall be responsible for complying with the following public accommodations requirements of ADA: (i) the "readily achievable" removal of physical barriers within the meeting rooms utilized by the group which the group would otherwise create (e.g., set up of exhibits I an accessible manner) and not controlled or mandated by Hotel; (ii) the provision of auxiliary aids and services where necessary to ensure effective communication for the group's program to disabled participants (e.g., Braille or enlarged print handouts, interpreter or simultaneous videotext display); and (iii) the modification of the group's policies, practices and procedures to enable disabled individuals to participate equally in the program.

1.3 Mutual Cooperation in Identifying Special Needs. The group shall attempt to identify in advance any special needs of disabled registrants, faculty and guests requiring accommodation by Hotel, and will notify Hotel of such needs for accommodation as soon as they are identified to the group. Whenever possible, the group shall copy Hotel on correspondence with attendees who indicate special needs as covered by ADA. Hotel shall notify the group of requests for accommodation which it may receive otherwise than though the group to facilitate identification by the group of its own accommodation obligation or needs as required by ADA." (Jonathan Howe, Howe & Hutton Ltd., Chicago)

III. LIQUOR LIABILITY:

Significant Liquor Liability Case:

Rippe v. Oregon Correctional Association (December 1986). The association was found liable and ordered to pay plaintiff $300,000 in damages for injuries sustained in a car accident with an association member who become intoxicated while attending an association conference.

Commercial host vs. Social Host

Commercial host: licensed alcohol servers (hotels, bars, bartenders, caterers)

Social host: Usually the planner's organization

"For the most part, legislators and juries in civil cases view the social host as having a lower degree of responsibility than the commercial host." (Jim Peters, president of Responsible Beverage Service Council, Scotts Valley, CA)

"95% of the time the general liability for people who consume too much alcohol rests on a hotel or the facility that is serving the individual." (Jim Anderson, counsel to PCMA and Greater Washington Society of Association Executives)

Most often hotels and other licensed alcohol servers, not a planner's organization, become the primary target of a liability suit. According to the 1990 Alcohol Server Liability, 41 states have either legislation (known as dram shop laws) or court decisions that can result in commercial servers' liability for actions of their patrons. Washington State has Common Laws (those that take effect via the judgements of state courts) on the books holding Commercial Servers liable. Courts have also found companies liable for providing liquor to intoxicated employees.

"The trend now is for planners to spell out in contracts that the hotel maintains control of the sale and service of alcohol, and that the hotel will indemnify and hold harmless the group for any liability." (John Foster, atlanta-based attorney specializing in hospitality law)

Precautions to reduce social host liquor liability exposure:

HOWEVER, If a liquor-related accident stems from a meeting or convention, the sponsoring organization will most likely be sued. If a jury finds the organization a negligent contributor to the accident, the group had better be insured -- the damages can be costly.

To avoid an accident (and in the event of one, to win a favorable jury verdict) planners should take considerable precautions in planning functions involving liquor. They can demonstrate that the organization attempted to act responsibly which can sway a wavering jury in the group's favor.

Key issue in liquor liability cases:

Who has control of the function, who is serving and who is supervising?

Planners can insulate themselves to a certain extend by letting the hotel provide and supervise the liquor

.

Spell out in your hotel contract that the hotel will follow responsible alcohol service procedures:

it will not serve noticeably intoxicated guests or anyone under age

and that the hotel will indemnify and hold harmless the meeting planning group for any liability that might accrue because of alcohol.

Liquor liability check list:

Before the event:

Know the state liquor laws in the state you are holding the function (check with the local chapter of MADD.)

Be sure the host facility is licensed to serve liquor (ask for a copy of its liquor liability insurance certificate).

Specify in contracts with a supplier that is has control of the sale and service of alcohol, and that if a problem arises, the supplier will be held responsible.

Coordinate with the facility on how much liquor is poured per drink (1 oz. per mixed drink, 5 oz. per glass of wine, 12oz. per beer).

Request Posi-pour dispensers rather than free-pouring will control drinks and can limit costs.

Limit alcohol distribution to trained servers -- DO NOT allow guests their own drinks -- and do not have your staff serve a bartenders.

Limit cocktail receptions to no more than one hour.

Do not use open bars (establish a free ticket systems)

Arrange for a drive-home service.

Plan activities (dancing, raffles) so that guest do not concentrate solely on drinking.

Keep notes of the planning process.

Liquor liability insurance -- most general liability policies will cover general host liability which protects non-commercial servers of alcohol. However, agents suggest planners consider additional coverage when their event seem to encourage liquor consumption

At the event:

Do not allow the planner to drink alcohol during the event.

Do not allow minors to drink alcohol.

Serve food before alcoholic drinks are offered.

Have food walked around the room (Encourage eating)

Serve high protein food (cheese, chicken wings, mozzarella sticks) to neutralize

Avoid salty foods

Provide non-alcoholic alternatives and encourage them.

Do not announce "Last Call."

Close the bar one hour before the end of the event, and begin service of non-alcoholic beverages including coffee.

Order--do not just offer-- an attendee a ride home if he or she is not staying on site and appears disoriented.

IV. SAFETY & SECURITY:

Planners who do not research the security of the site of their meetings are asking for trouble, for their attendees and for their organizations. "If a planner is found to be negligent in warning meeting-goers about possible dangers in certain areas or does not properly research the security of hotels hosting attendees, the planner's organization might be held liable for damages incurred." Jonathan Howe, of Chicago based Howe & Hutton Ltd.

Security procedures:

must check for I.D. to get new key

operators and front desk staff should not give out names

operators should not ring through to room without name (even house phones)

maid should check key of all individuals who walk in a sleeping room while the door is open.

health clubs should not have a sign-in sheet listing with name/room number.

Fire/room safety checklist:

Does hotel have sprinkler system? on which floors? public space?

Are fire exits visible marked and lighted?

Safety lighting with power outage?

Posted fire evacuation routes from all meeting rooms?

Manual fire alarms located near exits?

Smoke detectors? public spaces? meeting rooms? hallways? sleeping rooms?

Fire safety instructions on sleeping room doors? show exits clearly?

Fire doors?

Type of lockset? magnetic key which can be changed for each guest?

peep holes?

Emergencies:

In general, meeting planners should be prepared for these crisis situations: weather, labor disputes, fires, bomb threats, political demonstrations, medical emergences and criminal activity.

Know the hotel's emergency procedures:

on-site EMTs?

911 or other emergency number

doctors (on-site or close by?)

nursing service

dentist

ambulance service

Most hotels have a house physician, but this person usually does not live on site and may not be available at the time you need him or her. Each hotel should have a system for providing emergency service and you must determine during preliminary planning the nature and extend of that service. For instance, it is important to hear how the hotel initiate emergency care. In some properties, the hotel switchboard operator initiates this precoces. In others, it is the security office of convention services staff. Avoid having contradictory messages conveyed in the midst of a crisis by understanding the

hotel's emergency system.

It is extremely helpful to know CPR. As a meeting planner in charge of many individuals, the chances that such training could prove useful are very high.

V. CONTRACT LIABILITY:

Contract: A legally binding agreement between two or more parties. It is the single most important document that hoteliers and planners have in dealing with each other. It should serve as a road map for the meeting, clearly spelling out all the whens, wheres, and how manys. Even if neither of the parties who wrote it were around at the time of performance, someone else should be able to pick up the contract and know what is to be done.

Contract requirements:

For a contract to be legal, four elements must be present:

1. an offer

2. an acceptance

3. authorization by competent parties

4. the terms of the contract must be in compliance with (and enforceable by) law.

Contract comments and recommendations:

ALL contracts offers are inherently one-sided!

AVOID LEGALESE! All terms should carefully worded and easily understood.

Read the fine print -- KNOW what you are signing.

Avoid ambiguities -- spell out dollar amounts, etc.

All changes need to be initialled by both parties, with both sides receiving copies of initialled changes (or better yet, a rewrite the contract).

Sign all contracts in the following manner (Your name), Agent for (Your organization)

Contract elements:

Often planners examine the portions that pertain to the room block, prices and when the meeting will be held, but skim over the rest of the contract's terms. Terms and conditions of a contract are equally or even more important the "space, rates, and dates." Especially crucial are conditions pertaining to cancellation, termination and indemnification, which determine when a group is liable for damages and how much it will have to pay if the contract can't be fulfilled.

Rates:

Rates should be specified unless the meeting is more than 2 years away.

If a meeting is booked more than 2 years out, agree on a formula for determining rates and write it into the contract (e.g., the current year's group rates plus a negotiated percentage increase, an agreed-upon percentage off the standard rack rate in the year the meeting will be held, or the current year's group rate plus and increase based on the yearly percentage change in the Consumer Price Index for the region the hotel is located).

Include a clause that the not lower discounts will be offered at the time of the event.

Discount for staff (a block at the convention rate less an addition percentage (10-50%).

Space:

Attrition (slippage or room reduction) clauses:

Hotel rooms, along with airline seats, are among the most perishable ofcommodities. That is why so many hotels are now including such clauses whereby the risk of low pickup is transferred from the hotel to the meeting sponsor.

In these clauses, the sponsor is contractually obligated to fill so many "beds with heads." If you do not do this, the hotel will expect you to meet certain minimum requirements or compensate the property when you fall below the number--either by paying for the rooms or having to pay for what was formerly "free" meeting space. (Always place a dollar figure in these sections.)

If your group has a good pickup history and strong enough clout, the best option is to negotiate the clause out of the hotel contract altogether.

Typical attrition clause will have 3 key variables:

1. The percentage of rooms the hotel will allow the group to either reduce, cancel or not use.

2. The cutoff date when this percentage figure is calculated.

3. The cost to be assessed: (Typically room rental charges are assessed for meeting space -- specify $ amount)

There are no hard-and-fast industry standards; the allowable attrition percentage can range anywhere from 5% to 50%! For example, on a small meeting booked short-term at an airport property, planners should be able to live with a 5-10% attrition from the original block. On the other hand, a planner of a large annual meeting booked five years in advance at a downtown property might reasonable expect a percentage of 20-30%.

For long term annual meetings, planners should negotiate the right to modify the room block on an annual basis 30 days after each preceding year's annual meeting.

In-house equipment/AV company clauses:

Cover all meeting related charged contractually -- Insert a clause that there will me no additional charges.

Proposed in-house equipment clause:

"The Hotel will provide at no charge, a reasonable amount of meeting equipment, i.e. chairs, tables, chalkboards, lectern, easel, pads, pencils and 1 microphone per meeting room. Additional microphones may be rented at ($25) per day per microphone. (Your organization) reserves the right to hire outside equipment and AV suppliers without penalty or service charges. There will be no additional meeting related charges unless specifically stated and approved by (your organization)."

Other negotiable items (many related to convention centers):

Hall space rate (sq. footage)

Show move-in/move-out days, and charges

Utilities (lights, air conditioning, heat) charges

Exclusive contracts (electrical, decorator, security, AV, florist, etc)

meeting room set-up/reset costs

paging units, walkie talkies

telephone charges

parking charges

VIP parking (usually a certain number at no cost)

limousine transfers

Comp room policy:

Hotels will typically give the planner a free room(s) for a specified amount of sleeping rooms the hotel sells to the group. Spell out the breakdown of complimentary rooms your group will receive.

Methods of figuring:

• 1 room night complimentary per every XX rooms (usually 50) nights booked in the hotel by the group. (most liberal)
• 1 room night complimentary per every XX rooms (usually 50) picked up (standard)
• 1 room for every XX rooms (usually 50) per night picked up (most restrictive -- do not let the hotel use this clause)

1 or more suites (depending on group size) can be negotiated above and beyond the comp. room ratio.

Cut-off date:

If the meeting is one for which individuals will be making their own room reservations, it is important to determine cutoff dates beyond which the hotel can sell any remaining rooms in the room block to other guests.

30-21 days is standard.

A sliding scale cutoff date works well. Such an arrangement might state that after the initial cutoff date of three weeks out, the hotel will continue to hold half the remaining room block for the next week and of the remaining block until one week before the meeting.

Be sure to stipulate in the contract that attendees who do reserve a room after the cutoff date get it a the convention rate; if this in not written in the contract, a hotel has the power to charge the full rack rate to attendees who reserve late.

Deposit:

Try to avoid if possible.

Proposed payment clause:

"Payment to be made in full within thirty (30) days of receipt of itemized invoice."

If the hotel insists, protect yourself by a statement in the contract that the deposit will be held in an escrow account and that any interest earned on the money be credited to the group's bill. If the money is not in an escrow account, it becomes the property of the hotel. Should the hotel go bankrupt, the group, as an unsecured creditor, would be luck to get pennies on thedollar.

Also, refund of deposit terms should be included.

Walk Policy:

Spell out what the hotel must do in case it is overbooked and is forced to "walk" an attendee with a confirmed reservation.

Also include language that makes the hotel responsible for informing the meeting planner in advance if it is overbooked (so the planner can make sure no VIPs get walked).

Proposed walk clause:

"In the event the Hotel does not have a room available for a guest with a confirmation, the Hotel agrees to provide complimentary accommodations for one night at a first class luxury hotel in (specify location/distance).

In addition, the Hotel will provide complimentary transportation both to and from the Hotel, as well as absorbing the cost of telephone calls. The Hotel agrees to bring the displaced guest back to the Hotel the next day, and will make their accommodations available on a priority basis. Additionally, the Hotel will provide the guest with a fruit and cheese basket upon arrival.

The Hotel agrees to notify the (your organizations) meeting planning department if a sell-out situation is likely to occur, to guard against walking group VIPs."

Impossibility (also known as "Acts of God", "Force Majeure" or Termination):

Spells out the conditions under which either the group or the hotel can cancel the meeting without being subjected to liquidated damages (the legallyaccepted term for financial penalties).

Often, hotel contracts will be one-sided; listing only the hotel (and not your organization) in this clause. Always make sure your organization is included.

Proposed Termination Clause:

"Should events beyond either parties' control such as strikes, acts of God, or civil disturbances materially affect either party's ability to perform, thisagreement shall be terminated without prejudice."

While a good termination clause will cover situations beyond the control of the hotel or the group, it is important that planners add anything that is not included and that could prevent their group from meeting. For example, if a group is meeting in the Caribbean, the planner might want to mention hurricanes in the clause. In a third-world country, epidemics should be noted. If using a convention center, a statement should be made that the performance of the agreement is subject to the impossibility of the convention center hosting the meeting, in case it should burn down or be otherwise incapacitated.

During negotiations in this area, the planner should ask if the hotel is unionized, an, if so, on what date or date those contract expire.

Convention interruption insurance:

Should be considered to cover such circumstances such as a trucking or airline strike, fire, and flood. This is essential for meetings that generate a large portion of association operating revenues. Partial interruptions can be covered.

Cancellation:

Always include a cancellation clause it avoids ambiguity. If no cancellation terms exist, and the meeting is canceled, you may have "bought the whole store" -- it will be up to the jury to decide how much are the damages.

The core of a cancellation clause it the determination of how much a group will have to pay if it cancels. 2 major elements:

1. The dates on which the group will become liable if it cancels

Dates vary depending on property: average 1 year, more for resort, one month at an airport hotel. Associations 1 year due to large room blocks, corporations 1 month

2. How the amount will be calculated.

Spell out a specific dollar amount to be paid in case of cancellation rather than leave it to a more ambiguous formula such at the "peak night's room revenue".

A sliding scale is typically used with increasing amounts charged closer to the meeting dates -- generally with a cancellation charge being assessed if a group cancels one year before the meeting with increasing sums owed for every 2-month period approaching the meeting. Although it will vary from property, generally planners should not pay for anything if the cancel more than one year out as the hotel has plenty of time to resell the space.

The cancellation clause should also contain a statement to the effect that should the hotel resell any rooms, that revenue be deducted from the cancellation penalty.

Planners should also consider what to do if the hotel cancels the meeting on them because it has booked a more lucrative piece of business. Included could be all costs incurred putting together the meting to date, such as advertising and staff time, as well as the cost of relocating the meeting and the difference between their rates and the new hotel's rates.

Proposed cancellation clause:

"It is agreed that should (your organization) or the hotel fail to meet their commitment, actual damages would be difficult to determine and that the following schedule represents a reasonable effort on behalf of the hotel to establish its actual damages for cancellation. It is agreed that such schedule shall represent liquidated damages for cancellation of this agreement. In the event that the space ir resold, there will be no charge.

Cancellation of Agreement within one (1) year or less of convention date (list date): $10,000 will be payable to (list hotel).

Cancellation of Agreement within six (6) months or less of convention date (list date): $20,000 will be payable to (list hotel).

Cancellation of Agreement within three (3) months or less of convention date (list date): $30,000 will be payable to (list hotel)."

Indemnification:

An exemption from liability for damages (generally if it is not your fault).

A good indemnification clause says the hotel will pay the legal fees and any judgements against the group if someone sues the group and the hotel for something that is the hotel's fault; conversely, the group will do the same if someone sues the hotel and the group for something that is the groups fault.

For example, if an attendee slips on a wet floor in a hotel and sues both the hotel and the group, the hotel will assume the burden of defending the group; if a member of the planning staff spills coffee on the lap of an attendee and the attendee sues, the group and the hotel, the group will pay for the hotel's legal defense. (Reciprocal indemnification).

Dispute resolution:

Methods of dispute resolution included in contacts are litigation, arbitration, and lately, Alternative Dispute Resolution. Traditional arbitration, unlike litigation, is binding (no appeal). What's more, those hearing the dispute are not likely to know the hospitality industry. The Convention Liaison Council (CLC) instituted the industry specific "Alternative Dispute Resolution" in June 1992./ ADR is a form of mediation that is not, unless the parties agree, binding; is reasonable in cost, time efficient, and conducted by an industry panel chosen by the parties in dispute from people trained in dispute resolution.

Proposed arbitration clause:

"Any dispute that remains unresolved after following procedures set forth elsewhere in this contract, shall be initially submitted for review to the Convention Liaison Dispute Resolution Program, in Washington, D.C. By signing this contract, both parties agree that they ore voluntarily submitting all other disputes that arise under this contract to the Convention Liaison Council Alternative Dispute Resolution Program."

Cost: Sliding scale:

Disputes under $7,000: $550/party

Disputes over $5,000,000: $9,000/party.

BIBLIOGRAPHY/SUGGESTED READING:

Music Licensing:

Policing Music at Meetings, Association Meeting, February 1992, p. 16-20.

What Price Music?, Association Meeting, February 1992, p. 21-23

The Day the Music Died, The Meeting Manager, February 1990, p. 20-21

Should Planners Pay to Play?: The Facts about Music Licensing. Meeting News, March 1990. p. 48

Music Industry Tells Groups: Pay to Play., Meetings & Conventions, February 1990.

ADA:

"The Planners Guide for Barrier Free Meetings." Barrier Free Environments,Inc. Raleigh,NC

Americans With Disabilities Act: Who's Responsible?, Meetings & Conventions, Sept. 1992

Paving the Way, Successful Meetings, April 1992

ADA Compliance: A Convention Center Checklist, Convene, October 1992

Federal Register, U.S.Government Printing Office, 202-783-3238

Safety:

On Guard, Successful Meetings, March 1993

Planning for the Worst, Meetings & Conventions

Liquor:

Twists on Liquor Liability, Meetings and Conventions, January 1991, p 42-55

The Party's Over, Successful Meetings, Nov. 1991, p. 32-49

Holiday Cheers, Meetings & Conventions, Dec. 1992, p 18.

Contracts:

A Contract by another Name, Meetings and Conventions, July 1992, p10

Terms of Agreement, Meetings & Conventions, April 1993, p. 12

Think before you Ink, Meetings & Conventions, January 1992, p. 59-70.

Making your Numbers, Meetings & Conventions, Oct 1992, p38

Negotiating the Attrition Clause in Hotel Contracts, Convene, December 1992, p 55-56

Seven Questions to Protect Your Association, Convene, January/February, 1992,p 57-59