Venue hire contracts – key considerations - Farrer & Co

Page 1Venue hire contracts – key considerationsAlastair Cotton | February 2010If there are plans to hire out your venue for the first time, or a need to refresh an existing practice, putting in place arobust contract can pay dividends in making the venture successful. This article looks at some of the key provisionsto include in a contract for the hire of a venue to a third party. There is no ‘one size fits all approach’; much dependson the nature of the hiring and what risks the contract will ultimately need to cover. In any event, the following issuesusually need to be addressed in the contract.AccessThe contract must, of course, allow the hiree access to the venue in order to run the event. This access should takethe form of a licence to use the venue. A licence is a mere permission to occupy and enables the venue owner to takeback the venue once the event has finished. It is important to avoid any risk of the hiree obtaining a continuing right tooccupy the venue, after the event has finished, as a result of the inadvertent grant of a tenancy.Licence FeeHow much will you charge the hiree? Who will manage the event and what fee will this incur? There should also beprovision to charge for additional fees and costs incurred, or for services that may be provided to the hiree (suchas catering, cloakroom, water, toilet facilities, security etc). For larger events, you may want to consider payment byinstalments and a payment timetable.UseThe contract must detail exactly what is being hired, show the areas of the venue which can be used and state thestart and end times and the dates on which the event, set-up and dismantle can take place. Common access routesshould also be identified. The hiree must only use the venue for the express purpose(s) stated in the contract. Sublicensingor assignment of the rights of access should not be permitted unless there is express prior written consentfrom the venue owner. It is important to oblige the hiree not to damage the venue and to make good any damage thatdoes occur. Such provisions are especially important at venues of historical or architectural importance.LiabilityThe venue owner should usually exclude all liability arising from the event (although liability for death or personal injurydue to the negligence of the venue owner cannot be excluded). The hiree should agree to indemnify the venue ownerfor all damage, injury or loss to or occurring at the venue, for any claims relating to the event, all sums payable by lawand anything not recoverable under insurance. Certain events will raise particular issues of liability, such as noise orcrowd control, which need to be addressed specifically.InsuranceThis is the most crucial clause for the venue owner to insist on. A venue owner (whilst maintaining its own insurancefor the premises) should generally require the hiree to have a public liability policy or insurance, suitable to the eventtaking place, which supports the indemnity and protects against any loss or injury which may occur to any property orperson arising out of the exercise of the rights granted by the hire contract.Telephone: +44 (0)20 3375 7000 Email: enquiries@farrer.co.uk Web: www.farrer.co.uk

Page 2Cancellation PolicyIt is possible that the event will be cancelled and alternative dates may need to be agreed. Consideration should begiven to whether the hiree will be required to pay the licence fee in the event of cancellation and, where tickets areissued, who will be responsible for refunding tickets. You may want to consider having a staggered cancellation policy,with different fees payable according to when the event is cancelled, which could be a more commercially viable optionfor some organisers and earn more revenue for the venue owner. Insurance can also cover cancellation losses.FilmingIf the venue is being hired for filming purposes, the hiree must make clear to the venue the nature of the story andthe scenes to be filmed at the venue before the contract is signed. Confidentiality surrounding the plotline will beimportant, so both the venue owner and hiree should give consideration to security and confidentiality measures thatwill need to be put in place. Additionally, the venue owner needs to consider what its policy will be concerning press,media and photography and the future use of the footage filmed. For a more detailed consideration of film locationagreements see Helen Mulligan’s article in the Winter 2009 Newsletter.Other IssuesVenues may want to consider creating policies for ticketing, catering, pouring rights (eg with drinks suppliers),hospitality, broadcasting, merchandising, advertisement and sponsorship. Where any of these are an option, theinsurance needs to be adjusted to cover liabilities that may arise and the contract will need to deal with these areasappropriately. Venues with alcohol or music and dancing licences have further considerations which need to beadequately provided for in the contract.ConclusionThese issues should inform your considerations when putting together a venue hire contract (or reconsidering anexisting one). This firm has considerable experience advising in this area. If you think we can help with the contract foryour venue, please contact any member of the firm’s Intellectual Property and Commercial Team.Alastair CottonThis publication is a general summary of the law. It should not replace legal advice tailored to your specificcircumstances.Telephone: +44 (0)20 3375 7000 Email: enquiries@farrer.co.uk Web: www.farrer.co.uk