CLAUSE: To have Group charges placed on a master bill, Group must complete the attached credit application at least 30 days prior to the meeting dates. Should Group fail to establish credit, Group will be required to pay 100 percent of estimated charges on or before the day of arrival.
EFFECT: Once upon a time, a meeting planner showed up on site for a meeting only to find that the hotel would not even set up the meeting rooms until the group gave the hotel a check for all of the estimated charges for the meeting. The meeting planner for this well-established group had submitted the credit application, but, for some reason, credit had not been approved. In the freneticism of the days and weeks prior to the meeting, the meeting planner had not bothered to check the results of the credit application. The group had never had any problem with credit previously and did not expect problems this time. Likewise, the hotel failed to notify the meeting planner that credit was denied.
The moral of this story is to have a fail-safe to prevent the uncomfortable, awkward, and time-consuming process of having to write an unexpected check or get a wire transfer just to proceed with the meeting. In addition to improving the contract language, meeting planners should be prepared with checks, high- or no-limit credit cards, and/or 24-hour contact information for the accounting folks back at the office, just in case. Better language for the contract would look something like this:
Group will complete a credit application at Hotel's request in order to establish a master billing account. Such credit application should be sent to Group no less than ninety (90) days prior to meeting dates. Group will return credit application to Hotel no less than sixty (60) days prior to meeting dates. Should Hotel not inform Group in writing of the acceptance or rejection of its credit at least thirty (30) days prior to meeting dates, Hotel will be deemed to have granted Group's credit for a master billing account for the estimated total charges associated with the meeting that is the subject of this contract.
For more on law and contracts, click For more on law and contracts, click here.
Tyra W. Hilliard, Esq., CMP is an educator, consultant, and attorney on legal, risk management, and ethical issues. Her consulting and law practice focuses on representing associations, nonprofits, and independent meeting and event professionals. Her Web site is www.tyrahilliard.com and she can be reached by e-mail at tyra.hilliard@gmail.com.
More Clause and Effect Columns:
Clause and Effect: Attrition
Clause and Effect: Cancellation Policy
Clause and Effect: War and Force Majeure
Clause and Effect: Indemnification and Hold Harmless
Clause and Effect: Construction, Remodeling, and Renovation
Clause and Effect: Dispute Resolution
Clause and Effect: Function Room Assignments
The Five Toughest Meeting Clauses
The Five Toughest Meeting Clauses
Destinations and Legal Jurisdications
Clause and Effect: Disclosing Taxes, Fees, and Surcharges
Clause and Effect: Overbooking and Guest “Walking”
Clause and Effect: Use of Outside Contractors
Clause and Effect: Conflicting Groups
Clause and Effect: Lowest Rate Clauses
Clause and Effect: Food Donations
Americans with Disabilities Act
Clause and Effect: Early Departure Fees
Clause and Effect: Complimentary Room Nights
Clause and Effect: Hotel’s Right to Eject Troublemakers
Clause and Effect: Hotel’s Right to Modify Meeting Space
Clause and Effect: Marriott and the IATA Requirement
Clause and Effect: Establishing Credit
Clause and Effect: Putting Group Charges on the Master Bill
