| Article Index |
|---|
| Contract Components |
| Published Rate Clause |
| Room and Space Review |
| Method of Reservation |
| Audio Visual |
| Resell Clause |
| Claims & Disputes |
| Bankruptcy Termination |
| All Pages |
Page 6 of 8
Resell Clause
Plan in advance and know how damages are to be eliminated or reduced.
- The issues and details of sleeping room attrition and meeting cancellation are of utmost importance and spelling out specific compensation and responsibilities is a must.
- Generally, when a hotel contract is not honored (breached), the non-breaching party is entitled to lost profit, not lost revenue. Since lost revenue is difficult to calculate in advance, the courts allow the two parties to agree in advance on an amount or formula to be stated in the contract. It is best for damages to be stated on a sliding scale, with the amount increasing as the meeting dates get closer.
- A liquidated damage is a guaranteed dollar amount or specific formula to calculate a dollar amount. Liquidated damages must not be unreasonable or it could be deemed as a penalty if the case goes to court or arbitration.
- Mitigated damages hold the hotel accountable to try to resell sleeping rooms, Food & Beverage and other services. This duty to mitigate damages calls for the hotel to immediately try to replace business and minimize (or eliminate) compensation by the customer.
- Although this is the legal requirement, it is recommended placing a resell clause in the contract to make responsibilities clear.
- The other important issues are when compensation to the hotel is due and conducting an auditwith the hotel after the meeting dates to determine if there is a credit due to your account.
- Again, hotels are entitled to lost profit, not lost revenue
- Provide provision that the amount due (or part of) can be applied to future meeting (include specific timeline)
Indemnification
The agreement by Customer and Hotel to indemnify each other for own negligence
- Reciprocal protection for both the group and hotel
- Both parties mutually indemnify, defend and hold harmless against, claims of negligence/misconduct
- Many indemnification clauses are one-sided and it is a good idea to have an attorney review this clause (or create one for you)
Americans with Disabilities Act
- Required by law – must be stated in contract
