CONTRACTS CORNER: What's Wrong With This Picture? - Small Changes Can Create Big Problems

Source: Robin Roth, Senior Contracts Editor
E-Specs: January 10, 2006

It helps to have an eagle eye when reviewing contracts. Small changes - even a single word - can alter the meaning and return to haunt you. Small changes are hard to catch, so boost your proofreading skills by using all available tools of technology. For example, if you are using a template contract form it would be foolhardy not to utilize the Compare feature of the Windows program. This feature allows you to view only the changes to the template, so any small changes jump off the page. Test your skills for detailed contract review with the following phrases. They may or may not be recommended language for a hotel contract. (See answers below.)

  1. Peak night
  2. Group will receive one complimentary room for every 50 occupied, revenue-producing rooms on a per night basis.
  3. Reservations by your attendees after the cutoff date will be accepted based on room availability at the Hotel’s most available rate for the period.
  4. The Hotel will set five percent over the food and beverage guarantee.
  5. The Hotel and the Group each agree to protect, indemnify, defend and hold harmless the other party… against all claims… arising out of the negligence or willful misconduct of the other party…
  6. roup rates will be offered three days prior to and three days following the meeting.

Answers

  1. “Peak night” is the night or nights that have the greatest number of rooms reserved by the hotel. But if there are multiple peak nights, you need to define which night by being specific, for example "first peak night" or "first two peak nights."
  2. Change to "cumulative basis." You could lose a lot of complimentary rooms if calculations are computed per night.
  3. OK, maybe. Be sure to check the rate offered after cutoff date and specify whether the group will receive the group rate, best available, most available, or rack rate, as hotels sometimes insert.
  4. Hotel will set and be prepared to serve five percent over the food and beverage guarantee.
  5. Preferred: Hotel and the Group each agree to protect, indemnify, defend and hold harmless the other party… against all claims… arising out of the negligence or willful misconduct of the indemnifying party… [This ensures that responsibility for negligence or willful misconduct is allocated to the proper party.]
  6. Group rates will be offered three days prior to and three days following the dates of the room block.

Checking contract details carefully will ensure that you have the best possible contractual road map for your meeting.

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