July/August 1991

Beyond the Fine Print

Coping with facility contracts

By Joan Hough

Wayne Kimball spent months planning an elaborate audio-visual presentation for his show in a Chicago hotel. Two days before the extravaganza, Kimball learned he would have to hire union projectionists to operate the equipment. Noting that this stipulation was not in his facility contract, Kimball was informed that because the presentation was planned for the hotel's exhibit hall, it fell within the contractor's jurisdiction. "I didn't ask the right questions," admits Kimball, "but you'd think somebody would have told me." Total cost for this oversight: $12,000.

During her show's move-in, Jennifer Holloway was stunned to learn she would have to hire "garage attendants" at a West Coast convention center to monitor exhibitors' hand-carried freight. "Transportation attendants" were required on the ramp leading to the center's loading dock, as were "admissions attendants" at the front door. Holloway calls the facility contract misleading. "The language is ambiguous," she states. "I thought these people were 'available,' not 'required.'" Total cost: $5,000.

Although the names are fictitious, these scenarios are all too real. Show managers across the country continue to find themselves surprised by facility regulations and stunned with the corresponding invoices. Although reading the facility contract is still the most vital step, the exposition industry has become so complicated that reading the contract is no longer enough. Today, operations manuals must be reviewed, legal jargon transcribed and city codes deciphered. The lessons are clear, however. You can pay now, or you can pay later, but you will pay -- either in time spent reviewing contracts, or in monetary losses if you don't.

The first step
It's hard to believe that in today's litigious society, some show managers still don't read their contracts. But even industry veterans sheepishly admit it's true. Many feel that "if you've seen one contract, you've seen 'em all." Others simply say they haven't the time to examine every document which crosses their desk. Some admit to "hitting the highlights," and ignoring the fine print.

Each facility's contract, especially one for a convention center, is a standard agreement written to cover a range of events from public auto shows to rock concerts. "Standard contracts cover all those events, yet cannot do so," says Jed Mandel, a partner in the Chicago-based law firm of Neal Gerber & Eisenberg. "For instance, standard contracts call for the facility to get a cut of the gate at public shows. You don't expect to share an attendance fee at professional meetings. Show managers should always expect to modify a contract to some degree."

As tedious as it sounds, the first step toward having a contract both parties can live with is to read it word-for-word. Rules governing trade events are complex, and contract wording is complicated. Any questionable phrases or ambiguous statements should be completely clarified before signing. If a disagreement reaches litigation, the signed contract will govern the results.

According to Rick Dobson, Senior Vice President of Conventions and Exhibitions for the National Association of Broadcasters, "We have only found one contract in the last five years that we would even consider signing without first making major changes. Contracts tend to be one-sided, favoring whoever wrote them."

Although many believe that "a contract is a contract is a contract," nothing could be further from the truth. "Show managers are bound by the laws of the state they're in," explains Mark Leahy, Manager of the Hynes Convention Center in Boston. "If they don't understand the peculiarities of contract law in that state, they could have some real problems." Even within the same state, city codes and ordinances will apply to various facilities. Buildings within the same city will also adopt their own "house" rules, and even those may change from year to year.

The benefits of carefully reading a contract are two-fold: less on-site surprises, and less surprise expenses. Ronald Fippinger, Vice President of Marketing for Show Management & Services, Inc., says his company has saved thousands of dollars as a result of carefully scrutinizing each facility contract. "We recently had a situation where we were billed for services which the contract stipulated were 'no charge.' If we hadn't read every word of that contract, we probably wouldn't have caught the error, and we would have paid the bill."

Gary Huffaker learned his lesson the hard way. Senior Director for the California Restaurant Association's Western Restaurant Show, Huffaker received a $4,000 bill for garbage removal at his event. Upon questioning the bill, Huffaker learned that the surcharge notice was, in fact, contained in his contract. "I call this a character-building error," he quips. "Out of every manure pile grows a rose."

Astute show managers have learned that even innocuous-sounding clauses should always be reviewed. To illustrate the point, one industry veteran relates her story: "I hadn't read the paragraph on air-conditioning in my contract. I mean, how much can be said about air-conditioning? Well, during move-in, the temperature in the hall must have been near 90 degrees. Since the dock doors were open, the facility had the air off. When I demanded that it be turned on, I learned that I would have to pay for it. Had I read the contract more thoroughly, I could have negotiated the point, and maybe saved myself both money and grief."

Additional documents
Gone are the days when a facility contract was contained on two sides of a single sheet of paper. Most modern facility contracts contain a stipulation that show managers must agree to abide by all the rules and regulations contained in both the contract and the facility's "operations manual." Often as thick as small town telephone directories, these manuals contain everything from fire/safety rules to hall lighting levels.

Surprisingly, many show managers maintain that they are never given a manual along with their contract -- they have to call and request it. Receiving it is essential however, since it must be examined as carefully as the contract itself. Many of the stipulations must be passed on to exhibitors in the exhibitor manual, and much of the information will impact show planning and budgeting.

Inconsistencies are not uncommon between facility contracts and operations manuals. Dobson has found references to rules that aren't there, addenda he hasn't been given and laws which are unclear. It's also not unusual to find a clause which requires show management to abide by all the rules in the contract, the operations manual, and "any other stipulations deemed appropriate by the facility." Most show managers agree that signing such a document defeats the purpose of thoroughly reviewing the contract.

Mandel advises his clients never to sign anything that isn't complete, since they are agreeing to major financial obligations. "When a facility sends one of my clients a contract stating that they agree to abide by all local rules, I have it modified to read, 'copies of which you have provided me,' and make the facility provide the relevant documents." Show managers should also be sure the manual they receive applies to their event, since facilities sometimes have separate manuals for trade shows and public expositions.

Beyond the contract
Unfortunately, problems can still arise even after contracts have been put under the microscope. Not every situation can be anticipated, and some regulations are not dictated by the facility. It's ultimately the show manager's responsibility to find these "unwritten" rules. And, although it's difficult to know which questions to ask, finding the answers is essential.

Many show managers rely on their peers to help provide some first-hand knowledge. Events that are similar in both size and industry classification will often encounter the same types of problems. Another food show manager, for instance, could have warned Huffaker about the garbage surcharge at his facility since food shows typically produce vast amounts of waste. Some common questions asked among show managers: "Is there anything unusual I should know about this facility?" "Did you have any unexpected expenses?" "Did anything surprise you on-site?"

Suppliers can also help, since they are familiar with the experiences of their other clients. This is particularly important if the supplier has regulations which differ from those at the facility. As Leahy explains, "Although you may get a stated labor policy for the hall, such as 'right-to-work,' a contractor may be under a collective bargaining agreement."

Facility managers and convention service personnel are excellent resources themselves. They know the "unwritten" rules which have surprised other show managers, and are intimately familiar with the nuances of the written rules. A review of a show's planned agenda can help facility managers spot trouble areas which could cause unwelcome expenses.

Mandel recommends that show managers be forthright about their needs. "An exhibitor for one show manager I represent displays a truck, and because there's fuel in the truck they need a waiver. There's no problem getting it, but show management worked with the center from the beginning. It was part of the original negotiations."

Leahy warns, however, that show managers shouldn't expect too much from facility personnel. "I heard about a foreign trade fair at another facility where they planned to display cosmetics made of animal by-products. Apparently, this is an illegal product in the United States, and show management blamed the facility for not knowing the import laws of the U.S. How could we know something like that?"

Closing the deal
As facility contracts become more complex, show managers are becoming more astute. No longer an afterthought, contract review is now considered an integral part of a site inspection. Show managers ask for copies of the operations manual along with copies of the floorplan.

For the most part, facility rules and regulations are considered negotiable items unless they cover a fire or safety issue. The key to successfully altering these regulations is to recognize which clauses the facility managers can control. Municipal codes and state regulations are rarely changed, while in-house rules and special surcharges can often be eliminated completely.

After reviewing the final contracts themselves, most show managers have the documents examined by a second industry executive -- either their legal counsel, another staff member or their association CEO. Any ambiguities or unclear clauses should be reviewed by an attorney. Dobson notes that it's important to him that his legal counsel understand the trade show industry. "They need to be familiar with the law as it pertains to our business," he explains. "Most attorneys understand contracts. They can determine whether a clause is reasonable. But there are specific trade show items that might look fine to an attorney who doesn't know our business. Having someone who understands trade shows is really important."

Facility contract negotiations need not be considered an adversarial process. Although the contracts are written to favor the facility, they are often easy to modify -- even after a problem arises. "The signing of a contract is the start of a relationship, not the end," says Leahy. "If show management comes across a bump in the road, we'll sit down and talk about it. Facilities are in this for the long haul -- as are show managers. Who wants to burn a bridge over a small point? The way to start is to approach things together."