The quote above states it best. If people could reason and resolve disputes amicably, then there would be no reason to have lengthy contracts with mundane terms and clauses.
That not being the case, we need hotel contracts to be drawn up anytime you reserve a block of hotel rooms for a group.
Hotel contracts can be filled with all sorts of legal terms and conditions that most adults can’t make heads or tails of. While these clauses are not meant to be deceitful (Most are meant to protect the hotel from damages), they can confuse the reader of the contract.
In an effort to help you understand some of the hotel legal mumbo-jumbo , we have provided the most common terminology used along with our take on each.
Breach of Contract
A breach of contract is a direct result of the cancellation and/or termination by your group without giving the hotel enough notice. In your contract, there will be a cancellation policy which will specify the conditions under which a cancellation can take affect along with associated penalties, if any.
Our take: Most hotel contracts specify the cancellation policy and penalties if the group cancels. However, they do not specify the penalties and or damages that will be incurred if the hotel decides to cancel the contract. Insist that the language include both the hotel and the group.
Imagine booking a 4000sf ballroom for a company holiday party at a popular hotel in Miami Florida. With only a few hours to go, you decide to go early to the hotel to make sure everything is in order.
To your surprise, the hotel has rented the ballroom to a different group. In addition, they unilaterally decided to place your group in a different 4000 square-foot room that doesn’t have quite the same look.
While the size may be the same, this room does not have vaulted ceilings, beautiful chandeliers, and the new carpet you were shown in the main ballroom.
In order to avoid the above scenario, specify exactly what hotel rooms (Studio, Double bedded rooms, Junior Suites), and meeting spaces (size, exact room etc.) are being booked in the contract. Also specify the damages that will be incurred should there be any unauthorized changes.
If you travel even a few times a year, then you have most likely come across a hotel that is under a major remodeling. The sounds of drills, chainsaws etc. can be very disturbing to both hotel room and meeting guests.
In your group sales contract, insist that a clause be placed that states that you will be made aware of any remodeling ahead of time (typically 60 days) and that you will have the right to cancel the contract without penalties (and any deposits will be refunded in full).
If your group is holding a meeting at the hotel, then add the language that states that you have the right to ask for construction/remodeling to be stopped during the dates of your event.
Indemnification is an agreement between the hotel and your group not to hold the hotel liable for any damages, legal action, and fines in the case of negligence or misconduct by your group. This standard agreement is usually one sided in group sales contracts and you should consider making it reciprocal. It’s added protection that you don’t need till you need it.
Standard clause required by the ADA to be put into contracts. Boilerplate stuff you should not worry about.
Claims And Disputes
While it doesn’t happen often, disputes that can’t be readily resolved do happen between groups and hotels. If an disagreement cannot be resolved at the hotel, a formal dispute resolution procedure needs to be outlined.
Our tip: there are many national organizations (such as mediation matters) that can help resolve disputes and you should name one of them to be the arbiter. You should also state that the dispute has to be resolved in the state that you are from (assuming that your group event is in a different state). Doing so will save you several out-of-state trips to get the matter resolved.
Compliance With Laws
This is another boilerplate clause that generally means that the hotel will be in compliance with organizations such as OSHA, Department of Labor, and any state and federal agencies.
Changing Franchise, or Management Company
Imagine booking a Crowne Plaza Hotel for your group and a month after signing the contract, you find out that the hotel has changed brands. Do you have language in the contract that states that you have the right to cancel your meeting without any penalties if this happens?
Foreclosure or Bankruptcy
For obvious reasons, include some language in your contract that states that you have the right to cancel your group booking if the hotel declares bankruptcy or goes into receivership due to foreclosure. The stigma attached with a hotel in bankruptcy/foreclosure may have an adverse effect on attendance at corporate meetings.
Even if you are booking your group at a nonunion hotel, make sure to include a union strike clause. You should be able to cancel your meeting without penalties if there is an active strike by union members during the course of your meeting.
Not much to worry about here as this is a standard contract mainstay that states that neither the group nor the hotel will be liable for damages should there be a cancellation/termination due to conditions beyond their control.
Some of these conditions are specified as acts of God, any government restrictions, or in any other cause that is beyond the control of either party.
You should however specify that should the meeting continue regardless, any guarantees and attrition clauses should not be in effect.
Sale of Hotel
This clause basically states that any signed contracts prior to the sale of the hotel will still be honored by the new owners.
Most of the clauses we’ve mentioned above are meant to protect the hotel. In reading our comments, you should be encouraged to ask the hotel to modify the language to better protect your group in case anything goes wrong. If you don’t, then you’ll be at the mercy of the “Reasoning Man” that Mark Twain mentions at the beginning of this article.
As always, we would encourage you to have a lawyer read over any contract before signing it.
What should you do next?
Since you are reading about hotel contract clauses, why not read “The golden rules of negotiating with hotels“.