Thursday, July 24, 2008

Negotiating Contracts and Addendums

What is a contract addendum?

Wikipedia states " In other documents, most importantly in contracts, an addendum is the additional text not included in the main text which may contain additional specifications, provisions, standard forms or other information, especially pricing information.  A contract addendum is identical to a contract appendix (addendum is used more commonly).

Why do you need one?

When is it appropriate to use one?

For instance: 

A hotel sends you a contract for meeting space and a hotel room block, should you just sign it and send it back?  Of course not.  You have to remember that since the hotel is sending the contract, they are the ones protecting themselves.  So, who is going to protect you?  That's right, YOU. Understanding labor laws, strikes, over booking, meeting space assignments and inflation clauses are so key in building the proper skeleton to ensure your event is a success.  

That being said, dissecting each contract paragraph and researching the meaning behind the terminology will help you understand and mitigate the possibility of incorrect interpretation. Allowing a balanced agreement will also help.  A favorite term is "mutually agreed upon", that gives you the right to have a joint decision with the venue vs. it being dictated directly by them. 

Also, don't be afraid to mark up the contract.  Make a mess! But also remember to initial and date each change and confirm that the venue does so too.  If your preference is a cleaner contract, pull your highlighted clauses and changes and compile them in an addendum. Just be sure that the addendum overrides the contract otherwise it's a mute point. Getting the venue to agree to a second document may be more difficult but is definitely an option.  

Don't let the venue bully you!  Do your homework. For example, a prestigious hotel in NYC informed me that written changes weren't legal in a contract, but then didn't realize that clause #22 "required all changes to be signed and dated by both parties".  Education is key!

Good luck negotiating and if you have any further questions, feel free to email us at

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