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Contract addenda risk? Standard hotel mtg. contractual language could spur litigation.

Article Excerpt
As more corporations draft standard addenda to hotel meeting contracts, industry consultants warned both buyers and suppliers that they may be at greater risk for litigation. However, buyers said setting up master contract agreements with preferred hotel chains can make the negotiating process faster and safer.

Hospitality industry attorney Steven Rudner of Rudner Law Offices said during the past 18 months he has seen more groups approach hotels with their own addenda than ever before. Of these master contract agreements, a majority have serious flaws buyers could address easily, but 10 percent are flawed beyond repair, he said. Rudner said he has seen problems in such typical meetings contract addenda as non-compete clauses, confidentiality provisions, indemnification, limitation of liability, renovation clauses, attrition and credit clauses and lowest room rate guarantees.

Most of the problems slip through, Rudner said, and both hotels and buyers are signing "Trojan horse" addenda that actually open up the corporation or hotel to greater legal risks. For example, Rudner said 10 "prominent companies" use a specific indemnification clause that states the hotel agrees to waive "any and all claims" against a group for damages "unless and to the extent such claims or liabilities are caused by the group's gross negligence or willful misconduct." While the clause may seem to provide protection, a...

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