CMP Contract Negotiation & Legal Considerations 1 — Questions and Answers
Question 1: An attrition clause in a hotel contract typically requires the meeting planner to:
- Pay a penalty if the group uses fewer rooms than the contracted block (Correct answer)
- Provide 90 days notice before canceling the event
- Guarantee a minimum food and beverage spend per attendee
- Submit a rooming list at least 60 days prior to arrival
Correct 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.
Question 2: A force majeure clause in an event contract serves to:
- Ensure the venue provides maximum food and beverage service
- Excuse parties from performance obligations due to unforeseeable events beyond their control (Correct answer)
- Require the planner to force maximum attendance at all sessions
- Mandate the use of in-house audio/visual vendors
Correct 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.
Question 3: In hotel contracting, a 'master account' refers to:
- The primary hotel executive overseeing the group's stay
- A consolidated billing account that centralizes approved charges for the group (Correct answer)
- The lead negotiating contract between the hotel chain's corporate office and the planner
- A loyalty program account that tracks points earned from the group booking
Correct 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.
Question 4: An indemnification clause in an event contract is designed to:
- Increase the contracted room block if attendance exceeds projections
- Protect one party from financial loss or legal liability caused by the other party's negligence (Correct answer)
- Ensure the venue indemnifies the planner for all event expenses
- Set maximum liability limits for each party to no more than the contract value
Correct 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.
Question 5: When negotiating a hotel contract, a 'comp ratio' or complimentary room ratio typically means:
- The ratio of single to double occupancy rooms in the block
- One complimentary room night is provided for every set number of paid room nights consumed (Correct answer)
- The percentage discount applied to all rooms in the contracted block
- The ratio of sleeping rooms to meeting room space required
Correct 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.
Question 6: A cancellation clause in a venue contract typically specifies:
- The conditions under which attendees may cancel their individual registrations
- Sliding-scale financial penalties based on how far in advance the event is canceled (Correct answer)
- The venue's right to cancel the event for any reason with 30 days notice
- Maximum refund amounts for food and beverage deposits only
Correct 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.
Question 7: A 'performance clause' in a speaker contract most commonly addresses:
- The speaker's right to review audience performance evaluations before agreeing to return
- Specific deliverables, conduct standards, and remedies if the speaker fails to appear or perform as agreed (Correct answer)
- Audio/visual performance standards the venue must meet for the speaker's presentation
- Financial bonuses paid to the speaker if attendance exceeds a specified threshold
Correct 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.
CMP Contract Negotiation & Legal Considerations 1
An attrition clause in a hotel contract typically requires the meeting planner to: