Contract & Proforma PDF

Contract & Proforma Defining a Contract • An agreement between two private parties that creates mutual legal obligations. • A contract can be either oral or written. In hospitality industry, to avoid difficulties, oral contracts are not applicable. • The agreement should contain clear expectation...

Contract & Proforma Defining a Contract • An agreement between two private parties that creates mutual legal obligations. • A contract can be either oral or written. In hospitality industry, to avoid difficulties, oral contracts are not applicable. • The agreement should contain clear expectations as to what services are provided and what those services are not. • Services not specifically defined might be misunderstood, leading to unmet expectations. Detail which certified vendors you are working with and the services they provide. Contracts: subject areas 1. GENERAL CONTRACT INFORMATION • Details of the two private parties • Type of event. Date and time 2. OFFER • Meeting rooms • Accomodation • F&B • Number of attendees • Special requirements 3. A PROMISE TO PERFORM 4. A VALUABLE CONSIDERATION (RATES) 5. PAYMENT OPTIONS AND STRUCTURE 6. CANCELATION POLICY 7. DAMAGES 8. SIGNATURES (& stamp) Other important clauses: Contracts • Payment schedule and deposits o Payment details (you can annex a proforma) o State the initial and rest of deposits due date in the contract and note that no work will begin until the deposit is received • Cancellation terms o Stipulate refundable and non-refundable deposits o These clauses should state how long the client must cancel before being charged the full amount • Termination clause (Force majeure clause) o It provides legal protections if the services are canceled for reasons beyond your control (hurricanes, tornadoes, floods,…) • Indemnification clause o This clause protects the hotel from legal action due to client negligence or damage Contracts More terms… • Group rate – confirmed rate extended to attendees booking their sleeping rooms accommodations as part of a group room block. • Room blocks – the total number of sleeping rooms reserved for an event, or the number of rooms, seats, or space reserved in advance for a group. • Room pick-up – the number of facility guest rooms actually usd out of a room block. • Cut-off date – designated date when the facility will release a block of sleeping rooms to the general public. (the date is typically 3-4 weeks before the event). Damages policy ALL CONTRACTS Bank name Address Bank details Iban number Swift code Account number Signatures Names Acceptance Company/hotel Positions Date Attrition clause Contract wording that outlines potential damages or fees that a party may be required to pay in the event that it does not fulfill minimum commitments in the contract. If attrition is not mentioned in the contract, you don’t owe attrition policies “Double dipping” activity done by hotels and customers. Planners can charge hotels “reverse attrition” – hotel does not have the amount of rooms reserved in the block Example of cancellation policies Between 119 and 90 days in advance (indicate date) 10% of the total of the proforma invoice will be invoiced Between 89 and 60 days in advance (indicate date) 25% of the total of the proforma invoice will be invoiced Between 59 and 30 days in advance (indicate date) 50% of the total of the proforma invoice will be invoiced Between 29 and 10 days in advance (indicate date) 80% of the total of the proforma invoice will be invoiced Between 10 days and the event date (indicate date) 100% of the total of the proforma invoice will be invoiced The calculation will be made based on the total of the proforma invoice for the services originally contracted :: :: Example of room attrition policies 01 Between the signature of the contract and 90 days before arrival, a reduction of 25 % of the total number of contracted roomnights will be allowed with no penalisation. 02 Between 89 and 30 days no penalisation will be applied to reductions of 15 % on the revised room block 03 Between 29 and 10 days no penalisation will be applied to reductions of 10 % on the revised room block 04 Between 9 and 3 days no penalisation will be applied to reductions of 5% on the revised room block :: :: 05 3 days before the arrival day, if there is a reduction, total of the reduced roomnights 15 days or more before arrival will incur no penalisation From 14 to 10 days before the arrival date, if the cancellation affects more than 25% of the expected attendees, a charge of 40% of the contracted services will be made for the number of people cancelled Example of F&B attrition policies From 9 to 3 days before the arrival date, if the cancellation affects more than 10% of the expected attendees, a charge of 60% of the contracted services will be made for the number of people cancelled From 3 days before the arrival date until the arrival day, the total amount for the contracted services will be charged. :: :: Example of Meeting rooms attrition policies 45 or more days before the arrival date, with no penalisation From 44 to 20 days before the arrival date, 25% of the total meeting room rental cancelled will be invoiced From 19 to 10 days before the arrival date, 50% of the total meeting room rental cancelled will be invoiced. :: :: From 9 days before the arrival date until the arrival date, the total amount meeting room rental cancelled will be invoiced. First deposit of 15% of the total of the proforma invoice as confirmation of the event on signature of the contract. Second deposit of 35% of the proforma invoice (date: three months in advance of the event date) Example of deposit policies Third deposit of 25% of the total of the proforma invoice (date: two month in advance of the event date) Remaining amount of the invoice, 25%, to be paid 20 working days before the arrival of the group. :: :: The proforma invoice The proforma invoice is a document that is issued from the seller to the buyer to confirm the buyer’s intentions for the event. Proforma Invoice ✓ They’re ideal if you don’t have all the details for a commercial invoice – for example, before the goods are delivered / confirmation of number of attendees. ✓ They’re not a payment demand or request. Pro forma invoices are ‘good faith’ agreement, so your customer knows what to expect. ✓ Proforma isn’t used for account receivable or account payable, however, it is a legal document, and you could be bound to the terms and conditions laid out in it. The proforma invoice ✓ Some businesses request pro forma invoices for their internal purchasing approval process. Proforma Invoice ✓ Once revised, if changes are requested, the proforma invoice can easily be converted to a completed invoice by changing the title to ‘Invoice’ and adding an invoice number. The completed invoice can then be reissued. Proforma Invoice Subject areas • General information (Company’s + Client’s contact details) • Hotel Offer + rates: ▪ Meeting rooms ▪ Accommodation ▪ F&B services ▪ Equipment ▪ Special requirements • Miscellaneous • Method of payment (MOP) • Sub total (VAT not included) -> VAT -> TOTAL (VAT included) • Deposits