Legal expert: Three problem clauses to look out for when signing event contracts

Solicitor Matt Crouch says now is the time to take a thorough look at contracts.

Words by Matt Crouch.

The curve is flattening, but the annus horribilis continues.

Winston Churchill famously said, “If you’re going through hell, keep going.” We will come out the other side of all this!

One of the good things to come out of the last six months is that many event managers and PCOs have finally gotten around to updating their events contracts.

As an event manager or PCO, you are the “ringmaster” of the circus. You are surrounded by the attendees, sponsors, exhibitors and suppliers, and you will often have contracts with them all, as well as with your clients.

There are some who say, “Contracts are not worth the paper they are written on.” Nonsense! Your contracts are there to ensure both parties are on the same page, which is essential for relationship management and to avoid disputes.

If well written, your contracts will also limit your liability and establish appropriate rules for things like confidential information, intellectual property ownership, cancellation and yes, the flavour of the month, force majeure.

Now is the time to update your contracts for future business, with your clients, sponsors, exhibitors and delegates. Yes, there is a legal cost in doing that properly, but money spent getting well- written contracts will be a small faction of the cost of fighting disputes in court, or worse, going bust.

Now is also the time to spot problem clauses in contracts that others submit to you for signing. Here I’ll focus on three such clauses:

1. Indemnities

These insidious creatures are so common that many think they are “standard” and can be accepted. Indemnities come in many forms but they are simply a contractual promise to cover a loss incurred by the other party. In many cases they include liability for loss caused, not by you, but by third parties whom you do not control.

Indemnities expose your business to much greater liability than the usual principles of compensation allow. Worse, your insurance will, almost certainly, not provide you with cover for the liability you assume. Giving an indemnity exposes your business to a potentially catastrophic risk.

2. Cancellation clauses

These are common in supplier contracts and almost always appear in venue hire contracts. Always check cancellation clauses (usually a sliding scale) to ensure the amounts payable at various cancellation points are reasonable.

3. Force majeure clauses

Narrow force majeure clauses, that do not provide for refunds or for postponement without penalty, are responsible for a lot of the current misery being experienced in the events sector. Do get professional legal assistance to negotiate these and don’t just think “the supplier won’t listen”. You have more bargaining power than you think.

Matt Crouch, solicitor and principal at Matt Crouch Legal, is well-known as the legal expert in the events sector, having specialised for over 35 years in assisting participants in the events sector, particularly event managers, including many in-house, operating within associations.

This article originally appeared in the Summer 2020 issue of Spice Magazine.
Read the full issue below and subscribe here.

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