Source: Robin Roth, Senior Contracts Editor
E-Specs: July 5, 2005

One of the greatest benefits of holding a meeting or convention is the opportunity for attendees to network while they socialize. Although the festivity is beneficial for both professional and personal reasons, when the party's over your group can incur liabilities from the sale and service of alcohol. There are steps you can take ahead of time to prevent your group's exposure to risk by negotiating protective language at the contract stage.

Overall, contract language should focus on shifting responsibility to the hotel for catered functions where alcohol is served. Most states require that servers undergo alcohol awareness training, and the contract should state that bartenders must not serve alcoholic beverages to guests who, in the opinion of the bartender, appear to be intoxicated or underage. Regulate the amount of liquor served by specifying that drinks are to be served with pour tops that allow for exact measurement. Also, require the hotel to adhere to all federal and state laws regulating the sale and service of alcoholic beverages. This provision will help cover issues that you may not have considered, such as whether the hotel is licensed to serve alcohol off premises.

Educate yourself about the liquor liability laws in the state and locality where your meeting is to be held. The convention and visitors bureau may be a good resource. Most states now have dram shop laws that allow the victim of a drunk driver to sue the commercial provider of alcohol. ("Dram shop" is an archaic term derived from English taverns that sold liquor by the spoonful, called a dram - the dictionary definition of which is 1/8 ounce.) Some states also impose liability on the sponsor or social host of an event, which could include the association or other organization that sponsors a hospitality suite. The more attendees who are driving, the more your exposure to risks, but usually the risks are minimal because most attendees return to their hotel rooms. However, awards in alcohol-related lawsuits can be harsh and since the laws do vary considerably, it is a good idea to include liquor liability insurance as part of your general liability insurance. Finally, require that the hotel indemnify you for its negligence in the sale and service of alcohol.

Negotiating provisions in your hotel contract to protect against alcohol-related claims is an important measure to include in your overall risk management program.

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)