3 days ago
Tariffs, Riots, Travel Bans: Contract Language to Protect Planners
Planners are facing challenging — and potentially expensive — conditions as a result of certain Trump Administration policies.
There are still many unknowns, like the potential cost increases from tariffs, or whether housekeeping or banquet service at hotels will be impacted by immigration policies. However, it's important to take action now, said Paul Cataudella, principal attorney, Cataudella Law.
'The MICE industry has always operated within this intersection of politics, economics, and logistics,' he told Skift Meetings. 'What's changing now is the frequency and the volatility of these disruptions. They're happening more and more often on higher levels.'
Here is his take on how planners can address disruptions from specific Trump administration policies in their meeting contracts.
How can planners protect themselves legally from cost increases due to tariffs?
One way is not to mention it all; sometimes, remaining silent on an issue might be the best way to proceed. This gives you the chance to mold the future however the two parties want. I don't mean this sarcastically, but bury your head in the sand and almost ignore it until it becomes necessary, then address it in the event of a dispute.
The other option is to prepare language that attempts to arrive at a mutually agreeable or mutually beneficial outcome in the event that a particular tariff is imposed. This is where it gets really sticky because the language regarding tariffs requires a heightened level of specificity: What tariff? Who's imposing it? What country? What's the amount? When is it imposed? Does it actually have an effect on the program? What program elements is it affecting? Do you need documentation to support the increase?
Someone could say that a tariff was imposed, and that therefore the cost is 20% higher — but is it? Are those goods actually being imported by your suppliers or your subcontractors? Are they subject to tariffs, such that it causes an increase in that program element?
It's difficult to strike a balance between what is legally necessary to put into a contract versus what might feel good reasonably agreeing upon. There's probably a sweet spot in between there, as long as the parties communicate.
With the riots that are happening as a result of immigration policies, what language should planners be including in their contracts?
There's no doubt that riots can fall within the definition of force majeure, which usually includes language about civil unrest and event riots. The key to the force majeure provision is not just that a riot occurred, but that it rendered the meeting or event either impossible, impracticable, commercially unreasonable, illegal, inadvisable, or all of those things.
Force majeure doesn't when there are riots in a city and people choose not to attend. You would need to have a separate provision about any type of civil unrest that leads to a reasonable fear or suspicion that a meeting would be unsafe, and is therefore unable to take place.
Planners are concerned that the administration's immigration policies are going to have an impact on hotel staffing, such as banquet servers and housekeepers. How can you address this contractually?
About two years ago, there were labor shortages that were hitting us pretty hard, coupled with high inflation and supply chain issues. I included specific language about headcount ratios and minimum staffing levels for each service category. For example, how many people need to be available at check-in, drilling down to establish a measurable number of staff in correlation with the number of guests.
How can planners address attrition from international attendees who either can't or won't travel to the U.S.?
Instead of benchmarks based on headcount or guaranteed headcount, you can include language like 'obligations around best efforts' and 'market conditions' — phrases that are far more ambiguous. That is not my favorite approach, but it's one that is an attempt to try to find some middle ground.
Not attending because of a personal preference is different than not attending because you can't, because of travel bans. That is not a reason for contract cancellation or a severe modification 99% of the time.
