Contract Negotiation & Legal Considerations Flashcards

An attrition clause in a hotel contract typically requires the meeting planner to:

Answer: Pay a penalty if the group uses fewer rooms than the contracted block

Attrition clauses hold the planner financially responsible if the group fails to pick up a specified percentage of the contracted room block.

A force majeure clause in an event contract serves to:

Answer: Excuse parties from performance obligations due to unforeseeable events beyond their control

Force majeure (Act of God) clauses release parties from contractual obligations when extraordinary events such as natural disasters or pandemics prevent performance.

In hotel contracting, a 'master account' refers to:

Answer: A consolidated billing account that centralizes approved charges for the group

A master account is a centralized billing account set up by the hotel for a group, allowing approved charges such as meeting room rental and food and beverage to be billed directly to the organization.

An indemnification clause in an event contract is designed to:

Answer: Protect one party from financial loss or legal liability caused by the other party's negligence

An indemnification clause requires one party to compensate the other for losses, damages, or liabilities arising from the indemnifying party's actions or negligence.

When negotiating a hotel contract, a 'comp ratio' or complimentary room ratio typically means:

Answer: One complimentary room night is provided for every set number of paid room nights consumed

A comp ratio specifies how many complimentary (free) room nights the hotel will provide based on the total number of paid room nights the group actually picks up, such as 1:40.

A cancellation clause in a venue contract typically specifies:

Answer: Sliding-scale financial penalties based on how far in advance the event is canceled

Cancellation clauses typically include a sliding scale of liquidated damages where penalties increase as the event date approaches, compensating the venue for lost business.

A 'performance clause' in a speaker contract most commonly addresses:

Answer: Specific deliverables, conduct standards, and remedies if the speaker fails to appear or perform as agreed

A performance clause defines what the speaker is contractually obligated to deliver and outlines consequences—such as fee forfeiture—if they fail to meet those obligations.