4 Important Things Associations Need in Their Event Venue Contracts

COVID-19 has changed the way associations across the country hold events. It’s changed not only how they’re executed but also how they’re planned, including negotiating event venue contracts.

In a recent Feel Good Friday held by CSAE’s Trillium network on Jan. 28, Heather Reid, ARCT MSc DES, founder & CEO, Planner Protect Inc., shared her insights on what associations should include in event venue contracts as the pandemic continues to evolve.

Missed the event? Don’t worry. Here are some of the key things your association should look at when negotiating a venue contract.

Define The Purpose of Event Clause in The Contract

Reid said you may not have seen a Purpose of Event clause before, but with how the pandemic has changed the events industry, having one now is important. The clause essentially builds the business case for your event.

“What we need to do now more than ever is to build the business case for any event,” said Reid. “We need to understand what are the business metrics that will validate success and the business metrics that will validate failure to perform or the ability to perform.”

Some questions that should be answered in the Purpose of Event clause include:

• What kind of an event is this and how often is it held?
• Who are the attendees and where are they from?
• What is the critical mass needed to make the event financially viable?
• How long does the event take to plan?

“What groups have found having lived through the last two years is we got caught not being able to have clear enough contracts as to what measured success for an event,” said Reid.

When things are left unsaid in a venue contract, it can lead to a “he said, she said” situation on what metrics decide if an event is viable when an issue arises.

“If we’re caught in a situation like COVID, it is almost impossible to define force majeure and impossibility,” said Reid. “The rigour that is applied to those clauses are so narrow, that we need to be able to make sure that we have explained explicitly enough to be able to engage that contract clause.”

Venue Contracts Needs Specific Language Around COVID-19

Back in March 2020, COVID-19 was certainly an unseeable factor that derailed and cancelled events. But in 2022, that’s not always the case. That’s why it’s important to have specific language in the venue contract around COVID-19.

“If you are signing new contracts then Covid is a known foreseeable factor in planning your events, hopefully not for too much longer, but we don’t know. So, there needs to be specific attention paid to language that references COVID,” said Reid. “And that then spurs the discussion with the venue about how you can handle either the downsizing of your event, or if necessary, if we were to go back down into lockdown, the cancellation of the event or the termination.”

Broadening The Language of The Termination Clause

Termination and cancellation clauses often get confused. Terminating an event is for unforeseen reasons while cancelling an event is for known or desirable reasons.

Often the termination clause includes a laundry list of reasons such as acts of God, fire, flooding, curtailment of transportation, etc. People often get hung up on creating an all-inclusive list, but Reid said you should focus on language that broadens the scope, not narrows it.

“Don’t get hung up on giving this all-inclusive [list], but more about the language that speaks to the fact that you’ve given examples, but the potential factor is not limited to those examples, nor is it needing to be like those examples,” she said.

“In the language, you want to see ‘for reasons, including but not limited to’ and ‘not needing to be similar to,’ and then you give your XYZ laundry list.”

Don’t Forget The Cancellation Clause

“Termination” has been the buzzword over the last two years in the event planning world, but Reid thinks associations need to spend just as much time on the language of the cancellation clause too.

“We need to drill down on terms that work. On dates, if there is a sliding scale, do those dates line up with your goal or your no-go date? Do they line up with decision-making times?” she said. “You want to make sure that you’re not over-committing in financial resources.”

Read more informative content for association leaders on the CSAE Blog.