Contracts, Concessions and Costly Mistakes, Oh My!
Well, it’s that time again – we’ve cycled back to contracts! But since there’s so much to discuss (and as I told you, I absolutely LOVE reviewing contracts), it never gets old! So this week, as you can probably guess from the title, we’ll be covering 3 Cs – contracts, concessions and cost. But first I want to note a quick clarification on concessions – we’re not talking about movie theatre nachos! In the wonderful world of contracts (event or otherwise), a concession is usually a part of the negotiating process wherein one party is conceding, granting, or yielding something requested or desired by the other party. Sounds nice doesn’t it? Like you’ve won. You’ve come in with your laundry list of things you want, ever so politely listened to the desires of the other party as well, but somehow managed to get them to agree to your terms in the process. Score.
Fast forward 8-12 months and it’s show time!! Literally. It’s time that the venue make good on all of the wonderful concessions agreed to in the contracting stage including complimentary Wi-Fi and parking (valued at $38 per person, per day). Well, as your 400 attendees begin to arrive and check-in for this 5-day conference, while milling around a bit during check-in, you overhear the front desk agents quoting the parking and Wi-Fi fees to guests. Appalled, you run to your trusty binder to review the contract, because you KNOW this is supposed to be complimentary…. Searching……. Searching……..Searching……. Nothing. Although discussed in negotiations, and included in their proposal – the contract does not list those concessions, and you feel a mild heart attack coming on as you do the math - $38 X 400 people X 5 days = $76,000!!! And you’ve just learned a very costly lesson – if it doesn’t exist in the contract, it doesn’t exist.
Since I’ve learned that many times experience is the best teacher, I thought to again share with you this almost accurate account of my past. Thankfully, the truth is, I did catch the omission during contract review as I meticulously combed the document to ensure everything discussed was included. But the unfortunate reality is there are many who have not escaped the folly… I’ve had friends and colleagues share horror stories that have cost them hundreds to thousands to hundred of thousands, which certainly is no fun. None of us is perfect, but falling into a crater that deep just plain hurts.
So what’s the solution? Nothing’s fail proof, but for me, I’ve found these standard operating procedures (when employed consistently) to work wonders:
- Review your contracts alongside the respective proposal submission, and be sure to also include any notes you’ve taken from conversations. Let’s face it – you won’t remember everything, so double-checking is a must.
- Ask your staff or a colleague to lay a set of fresh eyes on each contract prior to execution. I’ve found a double-check is good, but if you take it to a triple-check, you’re golden. It’s like a universal law – that third person always finds the overlooked nugget!
Again, one blog couldn’t possibly cover all of the elements of contracting, so stay tuned as I’m sure we’ll be cycling through yet again sometime soon. Next time: Banquet Event Orders (BEOs) – did you know these little one-page wonders are binding contracts that can in fact put you in a bind if you don’t review carefully? Stay tuned…
Image courtesy of mihow