Asking yourself why you are a hospitality management major may give you direction
Hospitality management major is the one, offering students great variety of possible careers to choose from. For instance, one with hospitality management major can be involved in the work of hotel by taking such positions as hotel housekeeper, project manager, front office manager etc. or manage the work of the restaurant. In terms of hospitality management major opportunities I have always been most excited with the opportunity to launch my own business in order to be able to fully use my creative skills.
Thus I have decided to look forward to creating my own event organization. As any kind of business, an event organization requires in-depth understanding of legal issues related to its management. While being associated with such common legal issues as starting an organization (getting all necessary allowances and licenses) and constructing the necessary contracts, establishing and running event management organization is also considered with such specific issues as event ownership, compliance with laws and regulations, governing event production and creating viable mechanisms for holding international events (Bowdin., Allen, Harris , McDonnel and O’Toole, 565).
Other event organization running-related topics may include event procurement (bidding process and getting governmental support), brand protection and anti-infringement strategies, as well as risk management). Taking into account the need to profoundly understand nature and scope of each of the issues, mentioned above, I would like to concentrate on peculiarities of contracts in event management and risk management in event management as legal issues giving me direction with regard to my future employment in hospitality area.
Since ancient times contracts have played a central role in almost all spheres of social life. Due to the fact that common law does not offer a single definition of a contract, the majority of scientists tend to define a contract as an “enforceable promise” (Chen-Wishart,2). Thus the main elements, which construct the contract, are promise, agreement and recognition by the law. In modern business practice contracts tend to play extremely important role due to the fact that they help create a framework for relations in any sphere of business.
Only if parties have formally entered into contract, it is possible for a party to file a lawsuit against another party, in case a breach of contract obligations by another party occurred. In this regard it is worth remembering that contract law is concerned with great extent of formalities, which are designed in order to make the contract enforceable (Gillies, 315). Therefore, particular attention is to be paid to the form of the contract and formulations, being used in it. Special concerns arise in case parties reside in different jurisdictions.
Management of almost any modern event usually requires involvement of significant number of stakeholders due to the fact that holding an event requires renting a premise, hiring staff, making procurement, providing safety etc.
In case similar events are being held on regular basis, it is worth establishing long-term mutually beneficial contractual relationships with suppliers, so that reliable supply chains can be created. If a unique product or service is required, it is also possible to enter into short-term contract.
It is not surprising that in such a young industry as event management, little information is available on contractual framework of corporate events and event-related contracts (Chaturvedi 196). In this regard it is necessary to understand that in the past vast majority of events-related negotiations and deals were based on mutual informal duties and rights, so a degree of latitude existed with respect to the deal. Nowadays this informality is no longer good enough to serve growing needs of event management. The event office should perceive contracting as one of its key responsibilities.
This responsibility may include originating contracts, consulting the contractor and its legal department, as well as assessing contracts, being offered by existing and potential business partners. Furthermore, an event manager should be ready to the situation, when the corporation he works for or his own organization is involved in a legal suit, based on circumstances, associated with the contract. It is worth mentioning that the art of contracting is equally important for manager, who works in corporate event office and separate event management organization.
Contracts in events-related projects
Contracts serve a basis for event management documentation. Contracts are designed to specify who will be doing what, when and where it will be done and sometimes for whom and how it will be done. While in case a small corporate event is organized it is sufficient for involved parties to reach an arrangement regarding their rights and duties, if a larger event is organized, and suppliers, public or any governmental agencies are involved, it is necessary to ensure formal entering the contract.
Considering the issue from the point of view of project management, it is necessary to emphasize that contracts are recognized to be central to ensure correct project planning and implementation. In other words, contracts are wide-spread in project-based industries. For the one, starting his/her career in event management, it is important to, first of all, become aware about basic terms, being used in contract law in general (e.g., offer, acceptance, enforceability).
Then it is necessary to understand that event management-related contracts use lots of special terms, such as “vendor” (supplier of the resource), “resource” (goods, services or a mixture of goods and services). The way vendor accomplishes the deliverable is usually of no interest for contractor. Such an attitude can be considered the manifestation of “black box” model, which means that the direct link is being established between the specifications, given in terms of negotiation process, and the deliverable.
The example of “black box” model is used to show the importance of understanding the nature of relations between parties to the contract under the law of contracts. Lots of other examples can be used in order to show the role of models in contract law, as well as the correlation between modeling and flexibility.
One of endless dimensions of flexibility in contracts is associated with price of the contract. In some cases fixed-price (lump-sum) contract can be the best solution for supplier and contractor, while in the other it can be more beneficial to enter into an incentive contract. Incentive contracts are common for entrepreneurial events or corporate-sponsored events, which are characterized by an admission price.
Thus, apart from learning basic terms of contract law in general and specific ones, associated with event management, it is also necessary to obtain an in-depth notion about the models and concepts, implied in contractual relations between contractor and supplier with regard to holding an event.
Legal aspects of risk management in event management
As compliance with laws and regulations and creating contractual relations with partners, legal aspects of proper risk management, constitutes an important part of legislation, framing the relations in terms of event management. Variables, which are to be assessed with regard to the risk, associated with an event, include the number of participants, size and nature of the event site, time of day, age of participants, weather conditions, as well as consumables (food, alcoholic beverages) (Tarlow xii).
After having assessed the risk regarding the event, event manager is expected to consider the ways to implement the duty of care, taking into account the extent and nature of possible risk. If in case of creating relationships with partners, I was considering the topic in terms of contract law, here it is necessary to refer to tort and insurance law.
A fundamental legal principle, applied to all kinds of events, is that regarding taking all reasonable care in order to avoid acts and omissions, which can potentially lead to inuring employees, contractors, participants and visitors (Bowdin, Allen, Harris, McDonnel and O’Toole, 565). By-turn, a tort is most usually defined as a breach of duty of care owed to other people and having been imposed by law. In classical works on tort law the difficulty, associated with understanding whether a respondent owes a duty of care to a plaintiff or not. In this regard tort law usually operates two criteria, namely foreseeability and proximity of the risk.
While foreseeability deals with factual possibility of foreseeing the risk under study, proximity is considered in terms of the relationship between parties (claimant and respondent), physical proximity between the parties, causal links between the activities of claimant and damages, having been experienced by respondent, as well as respondent’s assumption of a claimant’s responsibility to take care in order to prevent injury, loss or damages, being experienced by another party. While the element of foreseeability is seen as a central one to the concept of negligence, in practice proximity is often seen as nothing more than a label, which is used by court to restrict the scope of liability for negligent action.
Apart from the duty of care related to preventing foreseeable risk of injuries, event management is concerned with one more duty of care, which lies in ensuring that the noise from the event does not impinge the amenity of the neighborhood of the venue, where an event is taking place. Vast majority of modern states tend to include the requirement related to noise control into environment protection legislation. Legal authority is allocated to state bodies in order to ensure implementation of this requirement. Sometimes license should be acquired to conduct an event, associated with the risk of significant noise.
Breaking any kind of duty of care in terms of event management is likely to result in an organization being sued for damages. In order to protect itself from losses, stemming from organizations being sued for damages, event management organizations are required to insure their liability.
Risk management is usually concerned with defining the level of risk, associated with the event. As I have mentioned above, the level of risk is dependent on many variables. In terms of insuring civic liability of the event organizer or providing other types of insurance services with regard to the event, the risk is being assessed, dependently only on the number of attendees and activities they are going to be involved in (type of the event). For instance, a one-off event, such as poetry reading or information meeting, which gathers up to 100 people can be considered to be almost risk-free, while a large outdoor or indoor event, requiring active participation of many people, is likely to be classified as high-risk.
Apart from assessing the event with regard to the likelihood of risks, risk managers also conduct classification of risks, dependently on their nature. For instance, the risk of falling from a height, when taking part in a bungee jumping event is much more severe than the one, related to property safety. Severity of risks is highly dependent on the nature of event and the number of attendees.
The most suitable type of insurance for events is public liability premium, which covers compensations, which are to be paid by organizers, if they are deemed to be responsible for damages of attendees. In addition to public liability premium insurance, other types of insurance may be required, dependently on the results of risk assessment. They are insurance of committee members and office bearers’ responsibility, cash, workers’ compensation and property insurance. The problem event managers are highly likely to encounter is lack of funds for buying public liability premium insurance, especially if high risk-related event is being prepared.
The options for lowering the costs of insurance may include aiming at assessing discounted premiums through group purchasing in terms of membership in associations of event organizations; changing the level of risk of the event (e.g, by eliminating particular elements from the program of the event); using comprehensive risk management plan to communicate with insurance company and report safety measure, having been taken, in order to reduce the level of risk; requiring attendees to sign a contract, which will assume that they are voluntary taking the risk and refuse from their right to sue an organizer for any damages or losses, associated with the event, as well as ensuring offshore (Bowdin, Allen, Harris , McDonnel and O’Toole, 580).
In terms of risk management it is also necessary to remember that it is always a responsibility of the event managers to find out and ensure compliance with all related laws and regulations.
As a modern and rapidly developing branch of hospitality management, successful event organization management is concerned with variety of legal issues, such as event ownership, contractual relationships with partners, licensing, trademarks, as well as risk management and safety etc. Thus event managers have the responsibility to possess an in-depth understanding of legal requirements to event production. Furthermore, when holding an event, they should be aware about the fact that they owe a duty of care to its participants. Therefore, aiming at minimizing any kind of legal liability can be also considered a part of the work of an event manager. Due to the fact that laws and regulations are subject to continuous change, it is crucial for an event manager to regularly obtain legal consultations on these changes. Getting-to-know legal framework of event management is important for both starting to work in an event management company and launching one’s legal entity, thus giving me direction in my future studies of legal issues related to management.
Bowdin, G., Allen, J., Harris, R., McDonnel, I., O’Toole, W. Events management. London: Routledge, 2012. Print
Chaturvedi, A. Event management: a professional and development approach. New Delhi: Global India Publications Pvt, Ltd., 2009.Print
Chen-Wishart, M. Contract law. Oxford: Oxford University Press., 2012.Print
Gillies, P. Concise contract law. Annandale: The Federation Press, 1988. Print
Tarlow, P.E. Event risk management and safety. London: John Wiley& Sons, Inc.