Contracting With a Venue
Venue contracts are the written agreements between your organization and a venue that outline the terms of your event. They are like a roadmap for your entire event, clearly stating what you’ll receive and what you’ll owe in return. Because the legal language tends to overshadow more practical concerns, it can be easy to overlook just how important venue contracts are. They protect the venue as well as the event organizer by outlining the obligations of both parties. Unexpected changes and costs can run a budget off the rails in a heartbeat, so the importance of these documents can hardly be overstated . Essentially, venue contracts protect you from both major problems (like venue closure) as well as smaller complications (like unexpected charges).
It’s not just event planners who need to understand the ins-and-outs of venue contracts. These documents affect all levels of the industry, from the venues themselves, to vendors, to attendees. As such, having a firm grasp on the terminology and structure of these documents can help you negotiate more favorable terms not to mention save your institution loads of time and money.
Terms of a Venue Contract
A comprehensive venue contract template should include the following key components:
Term. This defines the period for which the venue is being contracted, taking into consideration not just the date of your event, but also time for setup, rehearsals, and load-in and load-out. When it comes to venues, be aware of how much additional time you might require for moving acts in and out and the time needed for a sound check.
Fee Schedule. This should include detailed payment information including the deposit amount and when it is due, the balance due before the event, as well as any early or late charges that may be incurred if the client breaks any of the venue’s various terms and conditions.
Force Majeure Clause. This clause offers protection by either party – the venue or the buyer – in the event that inclement weather, acts of God, or other catastrophes befall the venue or event. It may even mandate that the venue be re-scheduled at another date in the event of the unpreventable cancellation of an event.
Cancellation Policy. This policy offers specific guidelines for cancellation, including a time frame of how far in advance of the event a buyer can cancel without penalty. It’s often recommended that a smaller and more manageable time frame is a better practice due to the often last-minute nature of scheduling today’s events.
Indemnification Clause. This is a safeguard for the venue; indemnification ultimately means that a party will bear the costs and losses should any claim arise and be made against both the venue and the client, or either one. It is not unusual for indemnification clauses to include language that extends the indemnification period beyond the completion of a successful performance, as some consequences don’t emerge until long after the event.
Confidentiality Clause. Clients may need to have this in place to protect sensitive information that could leak out publicly before an event. Or, it could be a way for a venue to describe very specific promotional language that should be used when promoting the event. In either case, this is the way a venue can protect itself both during and after an event.
Media and Liability Release. With the online sharing of videos by attendees, this protects a venue from any responsibility related to attendee-recorded and posted podcasts or video blogs that prominently feature the venue’s name or branding.
Editing a Venue Contract Template
Although our attorney drafted venue contract templates are designed to cover the most common issues that arise when dealing with venues, I customize them further for specific states or individual client needs.
For example, if a venue prohibits alcohol sales or outside catering, and you will be using an outside caterer, you likely need to modify the provisions to fit your specific situation. Or if your venue contract will be signed by a nonprofit corporation or a church, it may vary from the standard business contract.
Once you understand how the contract works, you can easily modify the template for your specific needs. Here are a few tips:
• Remove all references to rules that don’t apply to your event, such as:
- No smoking (for a wedding venue)
- Quiet time (for a non-noisy venue)
- Early morning curfews
• Copy and paste clauses that do apply from other templates, but be careful. For example:
- If you are using multiple venues, you might want to use the floor plan clause from the "multiple venue contract" template.
- If you need a bigger indemnification clause because you serve alcohol in your venue, look at the "alcohol waiver"
- If you only need to specify deposit and balance amounts on one contract, modify the wording to reflect payment terms on one page, instead of repeating the same clause.
• Make sure you aren’t repeating clauses; for example, venue insurance is typically required with the balance due.
• Is confidentiality required? If so, make sure that you add a clause requiring non-disclosure of the location before the contract is signed.
• If the venue has other choice of law requirements (such as a hotel or a national chain), make sure it is properly accounted for.
It’s best not to delete a clause unless it is completely irrelevant to your type of event. Why? Because it may seem like it doesn’t apply when you read it, but you may need to include it later. It’s much easier to modify another contract than to draft a new one from scratch.
Venue Contract Issues and Mistakes
People use venue contract templates because they want to do it themselves. It’s like buying an IKEA bed instead of hiring a pro – you’re willing to put in more sweat equity to save money. That’s fine, or in reality it’s great, but I see people making these common mistakes when they download a free template:
They don’t read and comprehend each word. Oh boy, this is the most common mistake. You’ve done one hundred events, you know what you’re doing – right? Wrong. A bad read-through has reasonable people signing up for credit card surcharges, for taxes they haven’t budgeted and for liabilities that could cost them money. Just take your time and read it again, but this time out loud.
They don’t customize the template for their event. This goes hand in glove with reading through each clause of the contract, but since so many people skip this step, I thought it worth mentioning twice. I’m shocked at how many people simply add in their name, their event name and the location where the event will be held, and think they are done. Yikes! Every single event, even if it’s held every single year, has a different version of itself. The world changes, people get married, they have babies, businesses change names, they go out of business, we have a recession, interest rates rise, everyone gets raided for their HRMCU – its all relevant information that must be added into the contract.
They forget to leverage for early asks. This goes back to people not reading and comprehending. If you ask for it once, your venue may not have a problem with giving it to you. If the venue doesn’t give what you want, ask for it again. Ask for it a third time. Ask. Ask as often as necessary to get what you want. Don’t sound demanding when you do it, but understand that the venues friends in the past haven’t treated them right. They made changes to the contract after signing. They didn’t pay the extra costs they agreed to. They called for help at the last minute. So, you must ask. Politely. Even though its awkward.
They don’t bring in a second set of eyes. Again, this is a no-brainer, yet no one does it. No one. They pick it up, give it a quick read through and then walk away feeling like a lawyer. Don’t get me wrong, that is how I feel after I do my billable hour work. But, realistically, everyone needs an editor. It has been proven time and again that a second set of eyes catches mistakes. If you don’t have anyone who can look at it for you, reread the contract in the morning, the afternoon and the evenings. Change the venue. Change the font size. Change the color of the font. Put the contract down for a few hours, and then return to it with fresh eyes. Do what works for you.
They don’t get it reviewed by a lawyer. I would get my contract reviewed by a lawyer every single time if I had my way, but I recognize that this doesn’t work for everyone and there is a cost to doing that. I’ve gotten into more arguments with lawyers over indemnification and liability clauses than I care to admit. And it’s not about spending money. I’m sure I’m not perfect in my interpretations. I’m not going to judge you if you say that you don’t want to incur those fees. I’m only suggesting that you do your research if you’re not getting a legal professional review. There are horror stories where a venue has assumed liability for anything that goes wrong at the event and that has never been a problem for them but that can be a problem for you. If you do not have a lawyer, I suggest checking your local bar association for pro bono work or for someone who will review your contract at a cost.
They don’t make copies. For clients that have limited budgets, I’ll send you a scanned version of your signed contract. I do not keep soft copies for my records, but I’ll send you what you’ve given to me. For my clients, I do keep an active form of your contract in my cloud-based software. But just be warned that you aren’t getting back your word docs – or they are coming back with edits in (hazardous) red for your feedback.
Legal Issues in Venue Contracts
With any legal agreement, the devil is in the details, and venue contracts are no different. There are a few different ways that the law could affect your venue contract, not the least of which are: jurisdiction, indemnification, and liability.
Jurisdiction
Jurisdiction principally refers to the authority under which an entity or person may exercise its power and may refer to both a geographical location or the actual subject matter. Jurisdiction will be relevant to preparing and enforcing legal rights and obligations under a venue contract.
Indemnification
Indemnification, or indemnity, relates to the obligation of one party to cover losses incurred by another . Indemnification is most often considered a way to shift liability from one party to another. Consequently, it is one of the most important legal concepts for the parties to consider and discuss. Both sides should evaluate and understand the implications of offering, or accepting, indemnification.
Liability
Liability is the legal term for a party’s responsibility resulting from injury or damages to another. In contractual liability, a party agrees to "be liable" for either its own actions or injuries and damages to third parties. Parties should be cautious when including broad, undefined indemnification clauses; they could easily be on the hook for third-party claims because of ill-defined exclusions.
Negotiating A Venue Contract
Negotiating the terms and conditions of a venue contract is a critical component of securing not only the best deal for your event but also the most beneficial terms and conditions. An experienced venue contracts lawyer will use a level-headed approach to carefully walk you through your options to reach a fair and reasonable deal. Following are just a few negotiating tips to keep in mind:
- Establish your priorities: What, specifically, are the terms that are most important to you? If you ‘win’ a concession on one term but lose out on several others that were more important to you, did you really come away with a better deal?
- Start low if negotiating a lower price: A good negotiator may be some places you cannot. In this regard, offer what you believe is a fair but lower price than what the venue is asking. This allows room for negotiating higher or lower depending on how the dialogue goes.
- Don’t be afraid to ask: Many venue managers would rather refuse than try to negotiate. If you have some sort of ‘odd ball’ request (which is usually not that odd, just a little different than what the venue usually sees), politely ask. There is no harm to extending a special request.
The ultimate goal of negotiating terms and conditions is to find a true win-win for both you and the venue operator. A professional venue contract lawyer can help you achieve this by tailoring the terms of your contract to meet the specific needs of both you and the venue operator.
Custom Contracts vs. Templates
You may wonder if it’s worthwhile to pay for a custom contract for your venue rental or if it’s sufficient to just use a template. The simple answer is that templates are a good place to start but there are both advantages and disadvantages to using a custom contract.
The biggest advantage to using a template is that it saves you time. You won’t have to take the time to create a venue contract from scratch. This gives you time to plan other aspects of your wedding.
A big part of looking for a contract that you can use is that it should contain standard language. Standard language accounts for most everything that you will need to cover in your contract. You can always add in clauses if you end up needing them, but getting the basics is usually the important part.
There are some disadvantages to using a template. One of those disadvantages is that the language in the template may not fit with your needs. Templates contain general language because they want to fit as many different situations as possible. Just using a template with no changes could lead to big problems down the road.
Another potential disadvantage to templates is that they could contain language that doesn’t apply to your situation. This is sort of the reverse of the other disadvantage. Any wording that does not apply to your situation could cause confusion about your rights and obligations under the contract. Even if the language does not remain in the final contract, removing that language could also be confusing.
Some venues may not allow you to use a template. Read your rental agreement carefully to see whether or not they require you to use a preapproved rental agreement. Some venues already have a custom contract that you must also sign so be aware of that when looking for templates.
The big advantage to getting a custom contract is that it could save you a lot of problems down the road. What the venues want to happen during your event may not be covered in a standard template. That could lead to arguments and problems later. Having a custom agreement that specifically covers what you and the venue intend for the event go a long way toward avoiding unhappy surprises.
The downside to a custom contract is that it could take longer to get a contract. The venue may need to approve the wording and that could take a while. Having your contract reviewed by a lawyer could slow things down as well. Consider that when looking at the pros and cons to seeing whether or not you want to resort to templates.
Helpful Resources for Venue Contracts
Tools and resources that can assist in the process of creating and managing venue contracts are arguably most critical in an age where time is so valuable to all of us, from attorneys to venue managers to brides and grooms. In addition to the template concepts discussed in the previous sections, there are various tools that can save time and wire your contracts to have some built-in protection. Here are some ideas:
Signing a lease quickly and without reservation is one of the biggest mistakes anyone can make. Make sure that your clients understand that they are entitled to have any part of the contract reviewed by an attorney, but if they do not have one available, here are some ideas provided by OKC Attorney Jonathan Reynolds of YWCA brand management fame:
1) eSignature 2) DocuSign 3) HelloSign 4) Sign Now 5) Adobe Sign 6) Eversign 7) Agreevo 8) Signable
It is amazing how many people still do not know about this tool. In short, registering your domain name with a company such as Go Daddy saves you from having to use the same hard copy address year after year for all of your correspondence (or requiring your clients):
• Think about changing the name of the business? You don’t have to change all of your correspondence. Use a domain name that describes your business, like…superfantasticweddingvenue.com
• Hot Phone Number? Why pay for a dedicated business line, when you can get a free Google Voice Phone Number that will ring your cell phone?
• Google Voice has an iPhone app, so does YouMail…which allows you to screen all your phone calls.
• You could even record a personal voicemail greeting, which prompts clients to send you an email, if you really don’t want to be bothered talking to them in person.
• You get the best of everything with Google Voice…call forwarding, voicemail transcription , and pre-recorded greetings.
• These services are free…so stop paying for a dedicated business phone number and get a Google Voice Number!
Everybody has heard of DocuSign, but the number of times you actually use it to execute the agreement? If your lease or contract is generated each time with numerous lines and options, it can be tough to get something done quickly. For example, when I am booking out my wedding venue, I will suggest 2 dates and require my contract to be modified to reflect those dates. This will only cost my legal team an hour on a retainer agreement to do this, and after that we are set. We can go on to book more clients, and sign them quickly.
So, rather than check with a local lawyer about venues and guest counts and dates all the time, you may want to try using an option like the GigSalad tool for comparison purposes. So, check out their price guide and see how you stack up next to others in your area. You want to be competitive?
When the signing it over the internet or online in a way that the client cannot access later sounds much better than a paper file. However, know that there are potential copyright issues with this and if you have someone like me as an attorney, try not to make me mad. I like paper, just say’n. I am NOT a big fan of relying on a contractor’s template for use with my clients. Instead, I have ALL of the clauses I need for all types of leases and contracts saved into a permanent system that I can recall at any time. However, I love the concept of a contract generator, so long as it provides templates for review and editing and allows for modification.
These are just examples of what I have run across in the last few weeks. I know that some of you may come up with additional options for this section, so please email me with them, and I will update the section to include your comments.