July 29, 2021 | By Matt Crouch, Principal, Matt Crouch Legal
In my 35 plus years as a lawyer in the conference and events sector, I have witnessed an enormous advance in the sophistication and professionalism of its participants.
Yet even now, despite the many jolts, slings and arrows that have been hurled at us by the pandemic, fires, floods and other tragedies, I still hear participants in the sector saying things like:
“I’ve never had a dispute with a client or supplier, why should I review my contracts?“
“I do things on a handshake, and I’ve never had a problem.”
Sadly, customer loyalty is not what it used to be. The person you are dealing with today may move on tomorrow, and may be replaced by a person who does not know of your past or sterling service, or who has their own favoured provider.
Business managers are more and more accountable to shareholders and other stakeholders; to the tax office, the ACCC, safety authorities and other government regulators. When push comes to shove, business people increasingly look for someone to blame. We may not be as litigious as our cousins in North America, but we are catching up fast.
As a PCO or event manager, you are the ringmaster of the circus, surrounded by contracts. Your contracts are at the core of your business and will define your relationships with clients, suppliers (including venues), sponsors, exhibitors and event attendees.
So, let’s consider what a good, well-written contract is, and what it will do for you. A good contract, among other things:
- Is thorough but says no more than it needs to say. Length should be purely a function of what’s needed for the “What ifs?”. Sometimes that may mean a longer document than you might expect, since conferences and events throw up a multitude of twists and turns. Liability, relationships with third parties, confidential information, intellectual property, cancellation and postponement, force majeure, termination rights – and much more – all need to be considered.
- Is clear and uses language that doesn’t have you constantly running for a legal dictionary. Clarity is essential – goods, services, pricing and liability should be clear – and ambiguity should be eradicated.
- Is well set out and tells a story – with a beginning, a middle and an end. It will have plenty of white space and appropriate headings and subheadings so the reader is not confronted with a huge block of impenetrable text.
- Strikes a reasonable and commercial balance between risk and reward.
- Does not expose you to liability that is not covered by your insurance. For this reason, clauses that make you liable for the conduct of others, and the dreaded indemnity, should be avoided, or kept to a minimum if they are present at all.
- Limits your liability effectively, so that you will not cop a claim that exceeds your insurance. Providing services with no limits to your liability is not only a recipe for bankruptcy, it throws the deal out of commercial balance. I always limit my liability – if I was not permitted to do so, I would want to charge a great deal more.
In essence, a good contract will manage and define the expectations of both parties – it will “protect the friendship”.
It will thus help you retain your clients, avoid costly disputes and stay out of court. If you believe that paying a lawyer a few thousand dollars for preparing a good contract (or reviewing those that are submitted to you) is an expense you do not need, just consider the expense – potentially hundreds of thousands of dollars – that you will incur if you end up in court. And if you lose, you will usually have to pay the other party’s legal costs as well.
So yes – a good contract is definitely worth the paper it is written on.
If you are a PCO, event manager, or other participant in the sector, and you are attending the Professional Conference Organisers Association’s national conference later this year, I will be presenting a comprehensive session on contracts – I hope to see you then.