Navigating business event contracts

Navigating complex contracts can seem daunting. Jan Tonkin of The Conference Company shares some guidelines to ensure all the key elements are included, terminology is understood, and important clauses are given particular attention.

Sealing an agreement can range from a handshake to signing a legal document. With a handshake open to interpretation and memories clouded by the passage of time, it’s good practice to have a written agreement.

That agreement should reflect the premise that both parties have a vested interest in each other’s success, clearly outline responsibilities and include a process in case things don’t go according to plan.

Contract basics

Contracting is a two-way street, so it’s worth taking the time at the outset to be clear about what you want to protect and why, and consider what the other party is wanting to protect and why.

At the very least, a contract should cover:

The parties/organisations involved
What will be supplied
When and how the goods or service will be supplied
Payment
Timing and manner of payment
Breaches of contract which can be fixed
Breaches of contract which can’t be fixed
Matters beyond anyone’s control
The contract start and finish dates

Contract terminology explained

A contract needs to be easy to read, but some legalese is needed. It’s therefore useful to focus on these common clauses.

Indemnity

To indemnify another party is to agree to compensate that party for any loss or damage which occurs. You only want to agree to that when you are in a position to take full responsibility for your actions.

Force majeure

A situation may arise which is beyond the control of both parties and neither should be liable to the other for any loss, damage, claim or liability suffered, for example, fire, flood, earthquake. Therefore, there must be a clause which protects both parties in such circumstances.

Right to set off

A clause which reads “we (the supplier) will deduct anything you (the host/organiser) owe us from anything we owe you” is one that should be removed from a contract. In effect, monies paid for one purpose, for example, an accommodation booking which is subsequently cancelled and due to be refunded, can’t be withheld if there is a dispute about an unrelated charge, such as conference catering.

Dispute resolution

“Neither of us are litigious and therefore when any question or dispute arises between us, we will make a genuine effort to resolve it”. With that as a guiding principle for the working relationship between client and supplier, there then must be clarity about the process. For example, if we are unable to resolve the difference within 30 days then mediation will be conducted in accordance with the rules laid down by the Resolution Institute.

Other clauses

Other clauses to include in contracts should address:

Cancellation
Confidentiality
Intellectual property
Governing law (if one of more parties are in another country).

With a contract in place which both parties have taken the time to review and refine, hopefully the document can stay in a drawer for the duration of the project. However, if not, it provides that layer of protection not possible with just a handshake.