For years planners have routinely signed a "letter of intent" that holds dates and space at a convention center years in advance of its event. Even so, there remains contention as to whether this document is legally binding. In today’s uncertain marketplace, the question is gaining new urgency.
Legal experts like John Foster, Esq., CHME, Foster, Jensen & Gulley LLC, say a commitment by the planner and the convention center’s acceptance of it meet the definition of a contract. "Granted, all the terms are not included, but the implication is that the association accepts any terms the center sends to it in the ‘real" license agreement," he says. "A court will enforce future rates and prices set by the center as long as they are based on fair market value."
Not so, counter others. According to Beatrice Kemp, vice president/general counsel, San Diego Convention Center Corporation: "The commitment letter doesn’t bind us until we have a signed contract."
To skirt this touchy issue, Orange County Convention Center phrases the letter of intent as a "space and date hold on a tentative or definite basis pending a signed contract," says Kathie Canning, deputy general manager.
A letter of intent without additional stipulations, some planners assert, leaves the center wide open to accept more lucrative business down the road. Convention centers maintain that show producers can pull out of the letter of intent if they find better terms elsewhere, even though planners promote their conventions far in advance, leaving them unlikely to pull up stakes.
The best way for a planner to rebut the presumption that the letter of intent is a contract, Foster says, "is to make the letter contingent upon the parties later executing a license with mutually agreeable rates, prices and terms" – and successful negotiation of hotel contracts to accommodate attendees.
That’s what the American Library Association does. "We write a letter of intent to the convention bureau, saying that our board has agreed to come in the specific year, with move-in and move-out dates, subject to successful completion of a contract," says Deidre Irwin Ross, CMP, director, conference services.
[Read more about convention center contracts in the upcoming December cover story of Association Meetings.}