These claims often stem from disagreement over whether the contract was frustrated or in other words not able to be performed as a result of covid-19 restrictions.
In our experience those most affected are the “do it yourself” venues, where caterers and entertainment etc. are all engaged separately by the client booking the venue. These venues understandably believed that provided there was no full lockdown, then events could take place even if there was an element of it not able to go ahead such as live music or a reduction in guest numbers as these were not things that the parties had agreed in the contract for hiring the venue. Accordingly where a client cancelled a booking in these circumstances, these venues often refused to refund any monies paid, often after correspondence offering an alternative date for the event as a compromise.
Unfortunately when challenged, this approach has not generally found favour with by the courts who have pointed to section 50 of the Consumer Rights Act 2015. This has resulted in pre contract discussions or advertising material etc. exchanged between the parties being allowed to be relied upon, resulting in implied terms around entertainment, guest numbers etc. all being found in contracts to the detriment of venue owners.
Moving forward, there are therefore some important questions for venues to be asking themselves before they continue to enter into new bookings.
- Is your contract fair?
- Is your contract jurisdiction appropriate?
- How full is your contract?
- Does your contract have an entire agreement clause?
- Does your contract contain a dispute resolution clause?
It’s not unusual for a contract to have a degree of favourability towards the venue itself. However, it’s important to be check that your contract does not go so far that it could be viewed as unfair. Examples of terms which could be viewed as unfair included contracts where retention of the full contract price is permitted even when no services have been performed and contracts which set the price post signing.
If your venue is in Scotland then your contract should state it’s subject to Scottish law. While there are similarities in consumer and contract law between Scotland and England, they are two distinct jurisdictions and a contract for a venue in Elgin which is subject to English law will only lead to headache and unnecessary expense.
A contract should not be war and peace but neither should it be a few lines long. Lack of detail leaves plenty of room for terms being implied by parties as a result of the pre contract discussions and correspondence.
It’s a common misconception that the terms agreed between parties to a contract are those solely written down in the contractual document. The absence of an entire agreement clause makes it incredibly easy to imply terms into a contract based on pre-contract discussions between parties.
A dispute resolution clause governs how any disagreement between the parties to a contract should be dealt with. These clauses can divert parties away from the public and often reputation ally damaging eyes of court and into confidential private dispute resolution alternatives such as mediation.
It’s not unusual for venues to undergo an annual makeover to attract new business. Why this annual regeneration has not previously transferred over into an annual review of terms and conditions is not hard to understand…we all know the option we would choose if it came down to splashing paint on the walls or being sat sweating over the small print. However if the pandemic has provided one lesson for business, it’s the importance of income protection and that conducting a regular review of your T’s and C’s must become part of the new normal.