In my last post, I explained insurance obligations as it relates to a hotel contract. If you missed that article, you can read it here. We also covered information on indemnity which can be found here. Now, I want to address the revenue commitment portion of your hotel contract.
What’s a Hotel Contract?
Yes, the hotel typically wants to be your partner, but only on the upside.
To hedge their bet on your use of the space, they usually inject a room and banquet amount as a minimum commitment. To further hedge their bet, they will usually add to it a liquidated damages provision, setting the minimum as the amount they get to recover from you in the event of cancellation or attrition.
Liquidated damages are those damages incapable of calculation with precision. Adding in this clause means that they don’t have to prove the amount of any loss. I will save for a later discussion the distinction between a liquidated damages provision, which is usually enforceable in court, and a penalty provision, which is usually unenforceable.
Don’t you think it is worth having counsel review your document?
DIY vs. Experienced Counsel
It makes no economic sense to invest money, time and effort into putting on an event and then not hire experienced counsel to review the agreement to make sure you are covered. We are trained to look for and proactively solve problems. If you are getting ready to put on an event, before you sign the contract, have it reviewed. You will be glad that you did.
If you would like to discuss this or any other legal issues further, schedule some time on my calendar for a complimentary session by clicking here.
Key Clauses for Your Hotel Contract
In a future post, I will show you some clauses that you need to try to get the hotel to insert that will protect you and to which the hotel should be amenable.