Creating an Optimal Vendor Agreement for Events

What is a Vendor Agreement?

A vendor agreement is a contract that solidifies the plan for services to be provided by a vendor. In terms of an event, it provides the details on how various parts of the event will be coordinated with a particular vendor or service provider. Once the vendor has been hired, it’s the formal documentation that helps ensure that the contract is fulfilled.
A vendor agreement is important because it details the formal relationship between a party and the vendor . Two key factors are the "scope of work" which describes what the vendor is going to do or provide and the "compensation," or how much they will be paid to do that work. Simply reviewing a quote or online pricing for a given vendor does not provide sufficient information to determine whether the vendor has the capabilities and expertise to provide the services contemplated.
In terms of events, a vendor agreement is typically used when engaging a third-party such as an event planner, florist, caterer, bartender, photographer or videographer, just to name a few.

Key Components of a Vendor Agreement

Understanding the obligations of all parties is essential to providing a basis for the subsequent U.S. or international agreement. Not only does this optimize logistics, as mentioned above, but it also lays the groundwork for contractual obligations under the law. These obligations can take many forms so before a vendor agreement is drafted you should have a good understanding of how the vendors will fit into the event, what their expectations are, and most importantly what your obligations are.
Payment Terms
Fairly standard, but must be clear, stating a consideration for the services provided. How much and when? Will an upfront payment, 50% or 75% suffice? Or do you need a full deposit? What forms of payment will be accepted? Can they pay with credit, check or even cash? Can they pay by installments or is the entire amount due upfront on a specific date? If the client fails to make the payment or is late what are your options? You have to decide at what point you would consider the agreement breached.
Scope of Services
This is essentially a breakdown of what is expected from both parties. Do you want to include a sample schedule for proofreading approval? You probably do, but if you don’t need one you should include a statement to that effect so the parties are fully aware and in agreement as to what the approval process entails.
As for the services of the vendors, are there any contingencies in place for things like venue logistics, rainfall, or outdoor events? Will parking or deliveries be an issue?
You may want to include a speaker or presenter schedule for the day of the event to ensure that everything runs smoothly. Also, if any of the vendors will be transporting property to and from an event, be sure to clarify what you will and will not attempt to move and where it will be placed.
Cancellation Policies
Often times referred to as an Act of God Clause, what are the circumstances under which either you or the vendor can cancel without penalty? A bad weather forecast? Perhaps a sporting event tournament or concert that’s going to pull people away? Even some non-natural disasters warrant cancellation provisions such as earthquakes or strikes. What happens on the day of the event if an illness or family emergency requires a cancellation?

Legal Aspects of a Vendor Agreement

While they may seem mundane when planning an event, vendor contracts can by far be the most complicated components of catering and event planning contracts. Legalese is in most contracts, but it is absolutely essential in vendor contracts – the only way to protect your company from liability is to be completely upfront and explicit about your services before an issue arises. A friendly handshake may earn you good faith in pub deals, but in most cases you’ll want a bit more than that to guarantee a successful event and protect yourself at the end of the day. While events can embrace spontaneity, your vendors should be anything but. Legally binding language, liability waivers, and dispute resolution stipulations in vendor contracts insure that everyone understands what’s expected of them, and that your companies have recourse in the event of an injury. The best strategy when approaching vendor agreements is to ask for them from the outset: this will give you another frame of reference when discussing services and make sure you don’t inadvertently change an agreement with the client. Depending on the company selling the service, there are a number of legal considerations that vendors must include to contractfully protect themselves, and therefore the planner who hires them. Cake bakers should always be explicit about all components of their product, including flowers, fondant, food coloring, ribbons, etc. In the case of something like a candy buffet, the language should reflect which types of confectioners will be present at the event, how much of each type will be available, and the method of presentation. Companies that provide party rentals should be clear about the condition of all items before they are delivered and set up at the event, even if this is implicit in the rental fee. In the case of transportation companies; procedures for service — including unexpected changes, what to do if the bus driver or car service is late, or what happens if the bus breaks down — should be fully detailed in the contract. Even the friendliest father-of-the-bride won’t like it if delivery of his daughter’s wedding cake goes awry because a small deviation from the color scheme was against the contract. When discussing services with your vendors, review your contract and make sure that they’re prepared to provide everything you’re promising to the client. It’s not worth finding out later that they can’t deliver the classic blackoubt car that the groom requested for the night of their wedding – when the couple is filing for a restraining order against you for emotional distress.

Tailoring a Vendor Agreement to Various Event Types

It is important that vendors understand the unique needs and services required by each type of event and it is equally essential that they communicate these requirements in their vendor agreements. For example, a wedding agreement may provide that a deposit is refundable if a wedding is canceled, while a festival agreement may state that all deposits are generally nonrefundable. A wedding agreement may contain details about pre-wedding meetings or engagement parties – two things that are not generally relevant to corporate events or festivals. Conversely, while a wedding agreement may cover welcome bags for guests or venue decor, a corporate event may require a detailed alcohol policy or event staff protocols. Festivals usually require the most detailed provisions, including rules about parking, late arrivals, load ins, and takes out. Festivals often also have many different types of vendors (e.g. artist, business, food vendor, beverage vendor) and special rules for each and every type of vendor should be incorporated into the festival vendor agreement. Vendor agreements for all types of events may contain force majeure provisions but what that means or how it affects, for example, an outdoor music festival that may be rained out, may differ from the meaning of force majeure in a wedding agreement.

Vendor Agreement Pitfalls

One of the most common mistakes event organizers make when drawing up vendor agreements is assuming that there is no need to include addenda if they have already agreed to a deal over the phone. While this is not always the case, unfortunately, relying on verbal communication can result in miscommunication. It is wise to create a detailed agreement either over the phone or in person, and then draft written agreements, which may be amended as necessary.
Another frequent issue is failing to include any provisions for cancellation. When hosting an event, you cannot always guarantee that you will receive a full refund for your rental costs if the event is canceled. Thus, it is often wise to place some of this liability on your vendors.
One of the most common issues relating to liability occurs when an unexpected problem arises. For example, the health department may issue a surprise inspection and shut down your food vendor for improperly preparing food , or your DJ might flake out at the last minute with no apparent excuse. You complain to the vendor, but the vendor’s liability ends there — in his or her mind, anyway. The best way to avoid, and deal with, these unexpected problems is to have a detailed contract in place that clearly outlines the procedures for what occurs if the vendor fails to deliver his services. This will discuss expectations and liability up front, allowing you to comfortably turn them over to your lawyer in the case of a dispute.
Another common mistake is to assume that the vendor’s agents and employees are also protected under the contract from any liability. They are not, which is a huge liability risk for you — in the event that your photographer is injured when hanging up a backdrop and decides to sue you, the photographer can sue your employees and agents, and those employees and agents can in turn sue you.

Vendor Agreements Negotiation

Negotiating the terms of any event vendor agreement can be one of the most uncomfortable and yet important aspects of orchestrating a successful event. There is an inherent power dynamic at play; the sole fact that you are asking for a favor places you at a disadvantage to the vendor who is providing you a good or service. Nonetheless, whether you are negotiating directly with a caterer, florist, photographer or other service provider, or working through an intermediary such as a banquet hall manager, venue manager or wedding coordinator, it is imperative that you stand your ground. Although they may possess more knowledge and expertise than you with respect to their field, if you work strategically you will be able to garner their respect.
It is the vendors job to make you comfortable enough to decide to purchase their service or product from them rather than anyone else. Make them work for your business. Most professional event vendors will be more than willing to negotiate with you to come to a mutually beneficial agreement. This is because good event vendors want to secure your business for the long term, and independent event vendors want you to spread the word that they are good at what they do. They will negotiate because they understand that in reserving your services now, they might just be securing your services for the foreseeable future. (If they do not negotiate with you, seriously question whether you want to do business with them at all.)
That being said, there are some very simple tactics you can employ to keep the negotiations favorable to you. For example, do not give a vendor the feeling that they are dealing with a tourist. If you do not understand something, ask about it. If you do not agree with the pricing, let them know that you do not understand how they arrived at that sum and ask what they would recommend. And above all, stand your ground. Do not be overly generous with maids of honor or paternal suggestions. Immediately request lower pricing for anything that seems unreasonable. If you do not think that the 5 hour open bar is wise, directly tell the bartender that you are not pleased with the price and that you will negotiate with the bar manager for lower prices.
Another tactic you can employ is strategy. Before agreeing to something, think about whether it is the best idea for you. If your florist is insisting on silk flowers and you had meant to use real flowers, tell the florist you are not certain whether you should go that route. If the photographer suggests that he shoot everything in black and white and not in color because that is "acting out," tell the photographer you are not certain whether that is what you want to do. If the dessert vendor is suggesting that you offer no less than three dessert tables and two dessert bars, tell the vendor that you are uncertain whether you should have bars if you already have tables. Act uncertain and unsure of yourself. The vendor will be just as likely to concede to your requests if they doubt whether you are certain of your choices.

Sample Vendor Agreements and Other Helpful Resources

Many professional associations will have contract templates available for use, and these can be a great resource to use as a starting point, particularly if they are tailored to events. There may be requirements in the contract template that must be renegotiated but you’ll at least have a document to which you can add additional provisions. Other resources for contract templates can often be found quickly online, either through vendor or client group associations or even by simply searching on a search engine.
Having a series of provisions ready to copy and paste into a contract can also save you time. Despite being a time-saver, though, be sure that changing the calendar year from 2016 to 2017 will be appropriate . Contents in the contract may simply not fit the next year. If there are other timeline requirements, like number of weeks to cancel, find out if there are potential conflict with other provisions in your agreement. For example, a provision that says, "The parties shall meet thirty days prior to determine if the meeting will be held" can have a serious impact on your contract’s cancellation policy or other deadlines.
The most important takeaway, though, is that contracts are different. You can’t simply cut and paste your agreement from one vendor to another. There are key differences between housing, audio-visual, and catering contracts. Those differences will exist even when a client is holding a meeting at the same venue for multiple years.