What are the best practices for managing cancellation and attrition fees?

1 Cancellation and attrition fees

One of the most common sources of conflict between meeting planners and venues is the cancellation and attrition fees. These are the charges that the venue imposes if the planner cancels the event or fails to meet the minimum number of attendees or room nights agreed in the contract. To avoid paying hefty penalties or losing your deposit, you should carefully review the cancellation and attrition policies of the venue, and negotiate the terms that are fair and reasonable for both parties. For example, you can ask for a sliding scale of fees based on the timing and extent of the cancellation or attrition, or request a credit for future events instead of a refund.

2 Force majeure clauses

Another important aspect of meeting contracts is the force majeure clause, which allows either party to terminate or modify the contract without liability in case of unforeseeable events beyond their control, such as natural disasters, wars, strikes, or pandemics. However, not all force majeure clauses are created equal, and some may be more restrictive or vague than others. Therefore, you should always clarify the definition, scope, and consequences of force majeure in the contract, and ensure that it covers the specific risks and scenarios that may affect your event. For example, you can specify the conditions and thresholds that trigger the clause, such as travel bans, government regulations, or health advisories, and the options and remedies that are available for both parties, such as postponement, rescheduling, or cancellation.

3 Liability risks

The third major area of concern for meeting contracts is the liability risk, which refers to the legal responsibility and exposure that either party may face in case of injury, damage, or loss caused by or during the event. To minimize your liability risk, you should always conduct a thorough risk assessment of your event, identify the potential hazards and threats, and implement appropriate mitigation measures and contingency plans. Moreover, you should also review the liability clauses and insurance requirements of the contract, and make sure that they cover all the relevant aspects and parties involved in your event. For example, you can check the indemnification and hold harmless clauses, which state who is liable for what and to what extent, and the insurance policies and certificates, which provide the coverage and limits of the insurance.

4 Negotiation tips

Now that you understand the key elements and issues of meeting contracts, you may be wondering how to negotiate them effectively and efficiently with your venue and other vendors. To achieve a win-win outcome and avoid common pitfalls, it’s important to start the negotiation process early, communicate expectations and concerns clearly and respectfully, do your research on the market conditions, the venue’s history and reputation, and the alternatives and competitors. Furthermore, be flexible and willing to compromise on some aspects, and find creative solutions that can benefit both parties. For instance, you could adjust the dates, duration, or size of your event, or add value-added services or amenities in exchange for lower fees or better terms.

5 Contract review checklist

Before signing the contract, you should review it carefully and thoroughly to ensure that it reflects all the agreements and details discussed and negotiated with your venue and other vendors. To help you do this, consider the following questions: Is the contract complete and accurate? Does it use clear and precise language, avoid ambiguous or contradictory terms, and define all acronyms and technical terms? Is the contract fair and balanced? Does it protect your interests and rights, as well as those of the venue and other vendors? Is the contract compliant and enforceable? Does it comply with all relevant laws and regulations, such as those related to taxes, permits, licenses, or accessibility? Does it have a valid governing law and jurisdiction clause? Answering these questions will help you to make sure that your contract is satisfactory.