Typical venue contracts protect the venue’s interests “to the maximum” should the event host wish to cancel their event… but may (or may not!) offer “the minimum” should the venue wish to cancel the event. Are you sure that your venue contract addresses and adequately mitigates the risks and damages for either party should the other “cancel”?
Do this with me! Grab a piece of paper and a pen, and draw a large + sign in the middle of the page.
On the horizontal line write “reason” on the left end and “no reason” on the right end.
On the vertical line write “event” on the top end and “venue” on the bottom end.
Here you have the 4 quadrants of cancellation in a venue contract!
As an event planner – you need to ensure that your venue contract protects you from cancellation scenarios that fit into these 4 quadrants. With the exception of "Force Majeure" (which will be the subject of future posts)… there are definitely scenarios that will cause one party to cancel the contract.
Spend a few moments thinking about situations that could happen in each of these quadrants.
Here are just a few to get you started!
Quadrant 1: Event cancels “with contractual reason”
- breach of contract by venue
- construction at venue
- change of flag / property management
- diminished performance standards at venue
Quadrant 2: Event cancels “with no contractual reason”
- internal fiscal/business decision
- too large to fit venue
- desire to host in another facility or destination
Quadrant 3: Venue cancels “with no contractual reason”
- wants to take larger piece of business
- ability to secure significantly higher room/rental rates
Quadrant 4: Venue cancels “with contractual reason”
- breach of contract by event host
- event host financially unstable or insolvent
- renovation by choice
- property closure
When you are reviewing your venue contracts, be mindful of all of the possible scenarios that you must be prepared to encounter. Future posts will address specific parameters of the cancellation clauses that will address mitigating risks and damages for both parties.
Ultimately, the extent of “OPTIONS” you have as the event host – should any of these situations be encountered – depends on the “enforcement tools” you have NEGOTIATED into the contract. Don’t be caught without addressing these 4 quadrants of cancellation.
Heather Reid is the Founder and Owner of Planner Protect – a first-of-its-kind boutique contract review agency that negotiates fair venue contracts for independent and in-house event planners, and event hosts. Heather’s webinars, consulting services and speaking engagements help hundreds of event planners and event hosts across Canada save tens of thousands of dollars every year. She believes passionately in educating planners about the risks and rewards of supplier contracts and is trusted equally by planners, clients and suppliers. Heather has more than 20 years’ experience in the event planning industry and is also Owner & Principal Planner of Innovative Conferences & Communications. As an expert in contract negotiation, Heather has been invited to speak on the topic at Incentive Works 2015 and 2016, Canadian Sport Tourism Association, PCMA East Chapter Meetings (Ottawa & Toronto), PCMA CIC Conference, and several CanSPEP National Conferences.