Chapter 9 Contract Considerations

Contract ConsiderationsContract Considerations

C H A P T E R 9

Legal Considerations • Insurance

– These needs are determined by the type and location of your event.

– Liability insurance is necessary no matter what because a facility owner will require you to purchase it to protect their interest in your event.

• Weather – Cancellation insurance can ultimately save an event from

bankruptcy before it has a chance to happen.

– Cancellations can occur because of weather, power outages, flu outbreaks, and other unforeseen circumstances.

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Legal Considerations (continued)

• Employment

– Staffing of events is key to providing a safe environment.

– Hiring adequate supervision and a trained and competent staff protects the event and facility managers.

– Employers must comply with federal laws.

– For the most part, sport organizations rely on volunteers.

– Select the most qualified volunteers because the success of the event largely falls on their shoulders.

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Legal Considerations (continued)• Regulations, licenses, and permits

– What you offer during your event will dictate the types of regulations, licenses, and permits you need.

– Common regulations are the use of loudspeakers in public areas, performing in a public area, and building permits.

• Food handling– When food is improperly handled, it leads to illnesses of guests.

– Hiring a food service manager with experience and proper training will ensure you have taken the necessary steps to offer quality food service.

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Legal Considerations (continued)

• Liquor

– Event managers face the difficult decision of whether to serve alcohol.

– Alcohol is a great source of revenue, but if you serve alcohol you incur risks.

– Develop a comprehensive alcohol management plan that is part of your overall risk management plan.

Contract Law 101

• Agreements between events and facilities, events and vendors, and events and ancillary contractors must be negotiated and formalized.

• A contract is a promise that requires that an offer be presented, considered, and accepted and the parties will enter into a legal relationship.

• Two types of contracts:– Bilateral involves two parties engaging in a promise.

– Unilateral is one direction; an offer is made but not accepted.

Contracts• Offer: The initial promise that one party gives to another to

either do something or not do something. There is usually a price tag included.

• Acceptance: When the person being offered something accepts the conditions.

• Consideration: Something of value offered by one person in exchange for something of value from the other person.

• Capacity: Being of legal age and mentally capable of understanding the conditions of the promise.

• Legality: The promise must be based on a legal transaction.

Types of Contracts• Facility

– Because most facilities do not put on their own events, they look to lease the use of their facility.

– When renting out a facility, the facility manager and event manager often have to come to an agreement and sign a contract.

• Game– These contracts are formed so there are no discrepancies in the

terms of the agreement between the teams participating. – The date, time, location, compensation for playing, any travel

reimbursement, rules, and regulations are always included in the contract.

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Types of Contracts (continued)

• Sponsorship– Formed to protect the best interests of the parties involved.

– Expectations, rights, benefits, fees, terms, governing laws, marks, logo usage, and duties should be discussed in the contract.

• Waivers and releases– If the event is participatory (e.g., a sport competition), use

waivers.

– A waiver releases the organization from liability should the participant become injured during the event.

Federal Legislation

• Events must follow the rules and restrictions of the facility where they operate.

• Americans with Disabilities Act (ADA)– Formed in 1990, this act aimed at mainstreaming people with

disabilities into all aspects of society.

– Facilities are required to provide barrier-free accommodations that could require modifications to current layouts.

– Everything such as event forms and hotel accommodations need to be taken into consideration by the event planner.

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Federal Legislation (continued)

• Occupational Safety and Health Administration (OSHA)– The primary goal is to reduce the number of job-related

illnesses, injuries, and deaths in the United States.

– The tragedy of the Indiana Sate Fair in August 2011 is an example of why laws like OSHA are needed.

– This shows why event managers must perform due diligence in hiring qualified staff and subcontractors.