This article is written by M.Arjun, a 5th-year student studying in Government Law College, Thrissur. This article deals with the essential clauses in a Venue-Hire Agreement.

Introduction

A venue-hire agreement governs the general terms and conditions for booking an event at a particular venue. It is vital for the owner of a venue and the hirer to be clear about their rights and responsibilities in relation to the venue and the event concerned. A venue-hiring agreement ensures that there is no misunderstanding between the parties and no details are left unaddressed. Any ambiguities or complications can be detrimental to the interest of both parties. 

Nature of events varies greatly in their duration, purpose, and target audience. There can be private events such as marriages, birthday functions and public events such as musical concerts and award nights. No single agreement works perfectly for every kind of events. A venue-hire agreement should be catered in accordance with the nature of events. Hence it is important to understand the nature of the event before drafting a venue-hire agreement.  Despite the lack of general format, there are few standard clauses that a venue-hire agreement should incorporate. Let’s discuss some of these in detail.

Definition Clause 

The definition clause helps to set out a clear understanding of various terminologies used in connection with the contract so as to avoid any ambiguity or indirect interpretations. Therefore terms like venue, event, vendors, guests, contracting parties and so on are defined within the clause to make the agreement more transparent.

Price And Payment

A clause governing the payments to be made for booking a venue is one of the most important clauses in a venue-hire agreement. The agreement should be clear on the total payment to be made by the hirer. It should also mention the advance amount which the hirer is required to pay while booking the event. A security deposit is usually charged for covering the damages caused to the property when a venue is hired. Also, the provisions relating to the refundability of various payments made by the hirer should be clearly mentioned. The time period for which the hirer should make the payments, as well as the mode of payment, should be specified. At the same time, a provision regarding the interest laid for late payments or cancellation of the venue-hire agreement should be present to make it more beneficial for the owner of the venue, in cases where the hirer fails to pay the requisite amount on time. The time period is required to be present in the agreement, within which the owner has mandated the security deposit after the completion of the event.

The Hirer’s Use of Event Space

The agreement should always mention the purpose of the event. Stating such purpose avoids any room for misrepresentation of the event by the hirer. The venue-hire agreement should contain provisions that specify how the hirer can use the venue as per the directions of the owner or officers in charge. This clause can also be used to prohibit the hirer from using the event space, contrary to the directions of the owner. Some of the restrictions may include restrictions such as an entry into a particular space, the permissible level of sound from audio devices and loudspeakers, decor restrictions, usage of hazardous equipment and so on. 

Entry To The Event Space

The venue-hire agreement precisely refers to the time period for which the venue is available to the hirer. The duration, start time and end time for access to the event space should be provided to avoid ambiguities. The hirer may need time for making various preparations such as decoration, in relation to the event. So it is important that this clause provides the exact time from which the hirer can use the space. There may be instances in which the owner can enforce the hirer to specify the type of the audience attending the event and limitations imposed upon them. In such cases, it might be important to include the audience who can access the event. All areas and rooms within the venue for which the client has been granted access including the granted access time should be pointed out in the agreement. Vendors/Service providers of the hirer who are given access to the event space should be mentioned. The maximum number of audience permitted to access the event should also be included in the agreement. The hirer can also set out a provision for limiting the access for particular staff/employees of the owner. 

Deliverables

Deliverables include services like accommodation, electricity, furniture, generators and all other equipment and amenities. The agreement should have clear provisions as to mention the services provided by the owner for the price. All the inclusions and exclusions should be set out in detail. The owner of the venue may mandate the client to avail some of the services exclusively from him or from any accredited vendors. For instance, some owners do not allow third-party catering providers to provide food for the function at the venue. In such cases, the agreement should expressly provide all the services provided exclusively by the owner or other exclusive vendors designated by the owner. The time for delivery of the deliverables should also be mentioned clearly. It is always better to quantify or describe each of the services provided in detail such as the food menu, maximum units of electricity authorized to use or maximum hours of operation of the generator in an appendix to the end of the agreement.

Insurance

The Insurance clause sets out the types and limits of insurance policies the hirer must obtain in order to cover for the damages caused in relation to the event. The insurance policies cover in respect of losses incurred to the venue, employees or visitors from bodily injury or property damage. Venue owners may not provide their space if the hirer does not avail proper public liability insurance in his name for indemnifying the venue owner. An insurance policy also protects the hirer from losses arising due to the cancellation of an event or from the absence of a performer or a guest to the function. Hence the losses suffered by the venue owner and the hirer are covered under the policy. The insurance policy also helps the parties to avoid unnecessary litigation.

Cancellation and Postponement of the Event

The cancellation clause lays down the conditions by which the hirer can cancel his booking. The method, conditions for cancellation and the notice period for such cancellation should be agreed by the parties to the agreement. Cancellation fee which is to be realised from the hirer should be expressly provided to avoid complications. Cancellation fee depends on the size of the event. Queries such as whether the cancellation fee applies if the venue is rebooked after cancellation, should be dealt with in the agreement. The owner of the venue can also lay down certain conditions by which he reserves the right for cancelling the event at times when the hirer has not complied with such conditions. Provisions regarding postponement, change in times of the event and amendments made to the event such as extending the time period of booking should be dealt with in the clause. Additional payments incurred during these circumstances should be addressed accordingly. A notice period within which the hirer should request a cancellation or postponement of the event should be agreed upon by the parties.

Responsibilities of the Hirer

The venue owner expects his client to fulfil various responsibilities throughout the event. This clause includes detailed provisions regarding safety, health, security and other code of conduct in connection with the owner’s premises, equipment and his employees. All the attendees and third-party vendors of the hirer are also expected to act in accordance with the obligations agreed by the hirer. Besides, the responsibility for complying with statutory obligations for conducting the event shall be passed on to the hirer in the agreement. 

Indemnity and Limitation of Liability

The indemnity clause indemnifies the owner from all the damages caused to any personnel or property managed by the owner. The hirer shall be liable for all the physical damages, legal expenses and loss of reputation caused to the owner in relation to the use of the venue by the hirer. On the other hand, the owner should indemnify the hirer for all his losses caused to him due to non-delivery of deliverables or negligence from the part of the owner. The limitation of liability clause limits the liability of the owner during instances such as theft, death, injury, physical damage caused to the property or guests of the hirer except in cases of negligence by the owner. The owner can also provide a provision for limiting his liability when the cancellation arises due to a breach of duty on the part of the hirer.  

Miscellaneous Provisions 

As mentioned earlier, it is very difficult to draft a venue-hire agreement which is adequate for various kinds of events. The clauses for a business conference very much differ from a musical concert. Hence there are various clauses which should be added to the agreement consonantly with the nature of the event. Considering the nature of the event, there can be separate clauses for: 

• Cleaning/rubbish removal,
• Decorations,
• Parking,
• Catering,
• Smoking and usage of alcohol,
• Broadcasting the event,
• Advertising/publicizing the event.

Governing Law And Dispute Resolution

The venue-hire agreement should provide a clause regarding the governing law and jurisdiction according to which the provisions of the agreement are construed or interpreted. The procedure for dispute resolution should be laid out in the agreement. For instance, if the parties agree to arbitration for settling disputes, it should mention whether the arbitration shall be before a sole arbitrator or else wise. The parties should also agree upon a governing law and appropriate jurisdiction for dispute resolution.

Common Pitfalls In Drafting a Venue Hiring Agreement

A venue-hire agreement should serve the needs of both the hirer as well as the owner of the venue. These agreements are catered considering the changing nature of the events. The wording, clauses length of these agreements differ greatly. 

When Venue-Hire agreements are small they may not serve the purpose

For instance, a very short venue-hire agreement looks like this. Here the agreement focuses too much on matters related to payment whereas it is silent on various provisions such as cancellation policy, deliverables included in the price, provisions relating to outside vendors/suppliers and so on. Not furnishing adequate details leads to uncertainty between the clients.

Where there is a substantial influence on the interests of the owner

On the other hand, here is a much detailed venue-hire agreement. The agreement stresses more on the rights of the owner and the obligations of the hirer. It misses out key clauses such as provisions for complaint and dispute resolution mechanism. The hirer is made to indemnify the owner and his property under every possible scenario thereby omitting the responsibilities of the owner. 

When the hirer’s rights are not expressed in detail

A venue-hire agreement is mostly drafted in favour of the owner. Hirer’s right such as timely delivery of deliverables, repayment of the security deposit by the owner, duties of the owner are not usually addressed in the agreement.

Conclusion

Therefore, the venue-hire agreement should be drafted in such a way that it provides sufficient details regarding the scope of the event, payments, liability of the parties  and so on. It should lay down the rights and obligations of both parties without any discrimination. A musical concert involves a large amount of advertising, publicity and brand sponsorships. Drafting a venue-hiring agreement for a musical concert in a similar fashion as to a private function such as a retirement party can be an absurd idea. Hence, the nature of the event should be considered thoughtfully before drafting the agreement. Not entering into a venue-hiring agreement can be a bad idea, especially when the event and the cost involved in hiring the event space, is substantially of high value. There can be several disputes arising at such instances such as disputes related to non-payment of the amount, cancellation related disputes, disputes concerning delivery of deliverables, liabilities of the parties and improper use of event space. As a consequence, is always a good idea to enter into a venue-hire agreement before booking a venue for any sort of event, be it big or small or private or public.

References

1. https://www.printablecontracts.com/Venue_Hire_Agreement.php
2. https://www.jcu.edu.au/__data/assets/pdf_file/0015/120417/Hire-Agreement-Form.pdf
3. http://crownpavilion.com/wp-content/uploads/2017/08/Event-Venue-Hire-Agreement.pdf
4. https://www.newcastle.edu.au/__data/assets/pdf_file/0010/473563/Venue-Hire-Agreement-2018-Terms-and-Conditions.pdf

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.