The events industry was among the first sectors hit by the pandemic and will be one of the last to recover, forcing many event professionals to cancel or postpone scheduled events. In the process, it has raised questions (and concern) around contracts and ensuing obligations. Here, Heather Reid, founder and CEO of Planner Protect, an Ontario-based contract review agency that negotiates event contracts for organizations and those hosting events, fields Corporate Meetings Network’s questions on this all-too important topic during this unprecedented time.
How has COVID-19 impacted event contracts and contractual negotiations?
It has been a game changer for event contracts. The industry was in a ‘seller’s’ market prior to the declaration of the global pandemic and almost overnight we found ourselves in a ‘buyer’s’ market — with no significant buying happening then, now or for an undetermined amount of time into the future. With the immediate reaction to, ‘What does our contract say,’ fresh in event hosts’ minds, there will be a heightened expectation for hosts to exercise and demonstrate increased due diligence before signing event contracts. This means that being able to competently read, thoroughly understand and strategically negotiate all terms of a contract will be more important than ever before seen in my 26 years in this industry.
What ‘holes’ in event contracts has the pandemic brought to light?
In my experience, prior to the declaration of the global pandemic, there was limited understanding about the termination/force majeure/impossibility clause and exactly what is required to be contained in it to fully protect events and event hosts. With the declaration of the pandemic and countless events needing to be postponed, rescheduled and/or cancelled, there has been immense attention given to this particular clause and what elements need to be included to make it robust and useful for both parties.
What are some key contract considerations for event planners as we look ahead to 2021, which may or may not see the return of in-person events?
For event hosts looking to renegotiate contracts or move forward with new ones, three items should be top of mind:
- Flexibility in assuming contracted obligations will be a key concern and should be addressed in clauses such as termination, cancellation, attrition, postponement and deposits.
- For events booked well in advance, protecting financial deposits through the use of escrow services should be explored. The financial stability/instability of venues and event suppliers should be considered when negotiating deposits.
- The renewed awareness of duty of care for protecting the health of attendees and event suppliers’ staff must also be addressed in the contract.
What sage advice do you have for event professionals?
Event hosts should not hesitate to invest in professional services and legal counsel to review and negotiate event contracts — just as they do in professional speakers, audiovisual providers, decor suppliers, caterers, and so on. The pandemic has taught us the valuable lesson that balanced contracts are the firm foundation upon which events are constructed or, regrettably, deconstructed.